Preamble

The House met at Eleven o'clock

PRAYERS

[MR. SPEAKER in the Chair]

BUSINESS OF THE HOUSE

11.4 a.m.

The Lord Privy Seal and Leader of the House of Commons (Mr. Fred Peart): With permission, Mr. Speaker, I should like to make a business statement.
In view of the recommendations which the Business Committee on the Finance Bill has made, the business on Tuesday, Wednesday and Thursday of next week has been rearranged as follows:—
TUESDAY, 18TH JUNE and WEDNESDAY, 19TH JUNE—Consideration on Recommittal of the Finance Bill.
THURSDAY, 20TH JUNE—Until 7 p.m., completion of the Recommittal stage of the Finance Bill.
Afterwards, progress on the Report stage of the Medicines Bill.

Mr. Patrick Jenkin: Will the Leader of the House accept the assurance that this announcement is indeed welcome to the Opposition? Will he convey to his

right hon. Friend the Chancellor of the Exchequer the view that it would be reasonable that no objection should be made—although I entirely appreciate, Mr. Speaker, that it is a matter for the Chair—to the appearance on the Notice Paper of starred Amendments on Tuesday, as there is obviously very little time now available for my right hon. and hon. Friends to table such Amendments?

Mr. Peart: I am grateful for what the hon. Member has said, and I take note of it.

Mr. Lubbock: Does the right hon. Gentleman realise that arrangements made so late in the week cause inconvenience to hon. Members? If this kind of thing happens in future, will he see that the Business Committee meets earlier in the week?

Mr. Peart: The difficulty is that the Business Committee met yesterday and I must take note of what it has said. I think that this present arrangement suits the convenience of everyone.

CUSTOMS DUTIES (DUMPING AND SUBSIDIES) AMENDMENT BILL

Ordered,

That the Third Reading of the Customs Duties (Dumping and Subsidies) Amendment Bill may be taken immediately after the consideration of the Bill notwithstanding the practice of this House as to the interval between the stages of such a Bill.—[Mr. J. P. W. Mallalieu.]

CUSTOMS DUTIES (DUMPING AND SUBSIDIES) AMENDMENT BILL

Not amended (in the Standing Committee), considered.

11.50 a.m.

The Minister of State, Board of Trade (Mr. J. P. W. Mallalieu): I beg to move, That the Bill be read the Third time.
The Bill gives us new powers to deal with dumping which have been generally agreed on both sides of the House. If I am in order, I would congratulate the Committee, which I was able to attend only for a few minutes, on the speed with which it dealt with the Bill.
Of the new powers, the first is the one which we shall now have to take provisional action in cases where it is needed to prevent serious injury while a full investigation of the facts is made. The power will be especially useful in dealing with any attempts to rush in goods in

anticipation of an anti-dumping measure, and it should be of equal importance in dealing with threats to our agriculture and horticulture where demands are seasonal and where an attempt is made to rush in products which may have the effect of causing material damage. The second new power is one to deal with abnormally low-priced imports from eastern countries and, plainly, it is desirable in our own interests to have the power.
The main criticisms have been not so much about the Bill as about the actions or alleged inactions of the Board of Trade in the past. We did not get any bouquets for the actions that we have taken, and there are many, particularly in respect of the chemical industry. Naturally enough, there were complaints from agricultural and horticultural interests and from the textile industry that we have not been sufficiently active. The reason for it is that, where we have not taken action, the industries concerned have not established a case, given the conditions under which dumping can be defined. But I assure the House that, once the conditions are met, the Board of Trade is ready to take whatever action is called for. We have every intention of using the powers sought in the Bill to give proper protection to our industries and our agriculture against dumping or subsidisation which is causing or threatening to cause material damage to our own interests. The Bill will help us to move much more quickly in the future than we have been able to in the past.
With that brief explanation, I ask the House to give the Bill a Third Reading.

11.55 a.m.

Mr. Peter Blaker: As we have made clear at earlier stages of our consideration of the Bill, we on the Opposition benches welcome it and hope that it will be speedily put on the Statute Book.
We welcome it for two reasons. The first is that it gives effect to the antidumping code agreed in the Kennedy Round, which is broadly similar to our existing code and which we believe will be of advantage to us because other countries which have been rather "trigger-happy" in taking anti-dumping legislation in the past will now be obliged to conform to the code.
Our second reason for welcoming it is because it enlarges the Government's power to take anti-dumping action by the imposition of provisional duties and, in addition, it sets up a statutory method of establishing the fair market price in relation to goods from countries with centrally-controlled economies.
There are two main questions which I would put to the Minister. The first of them relates to the provisions about imports from what, in effect, are Communist countries. I shall be interested to know how the Bill will work in practice and how the Board of Trade intends to use the powers given to it.
On Second Reading, my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) referred to a letter that he had received from the right hon. Member for Sheffield, Hillsborough (Mr. Darling) when he was at the Board of Trade. It dealt with the practice which the Board of Trade adopts in relation to allegations of disruptive trading by Communist countries. Perhaps the House will bear with me if I read an extract from it, because it is relevant to the point that I want to make.
The letter said:
We normally prefer …in such cases the easier and quicker course of considering any allegations of disruptive trading in the context of our current import quota arrangements with the country concerned. In considering such allegations, we base our decision on a comparison of the landed price, not including duty, of the goods about which the complaint is being made, with the ex-works prices of comparable British products and the landed prices of comparable goods imported from other market-economy sources.
Secondly, to make the point clear, it is necessary to refer to a Written Answer which my right hon. Friend the Member for Bexley (Mr. Heath) gave when he was President of the Board of Trade in 1964. Dealing with the same point about imports from countries with centrally-controlled economies, he explained the intentions of the then Government about the liberalisation of certain categories of imports from Communist countries which were prepared to agree to certain arrangements. He said that he would sanction the liberalisation of such imports
… only if the countries concerned will ensure that their goods enter the United Kingdom at prices which are not disruptive,"

—[OFFICIAL REPORT, 28th January, 1964; Vol. 688, c. 38.]
That is the relevant point.
Of course, a price which is disruptive is different from a price which represents dumping when one considers imports from Communist countries, since there may not be dumping in the technical sense because the price fixed by the controlled economy for its own domestic sales may be so low as to be unrealistic.
I understand that assurances were given to the Federation of British Industries as it was then, about the practice which would be adopted in the event of allegations of disruptive trading by Communist countries. The Federation was assured that the Board of Trade would not adopt any rigid criteria such as material injury in reaching decisions on allegations of unduly low-priced imports from those Eastern European countries which accepted the conditions attached to liberalisation. Thus I am informed that was the understanding of British industry that it would not be necessary to establish material injury in this context, and it is my understanding that British industry has not received any notice of any change in this respect. Therefore, it was rather a surprise to me when the Parliamentary Secretary, in Committee, said:
Under the disruptive trading arrangements, regard must still be had to material injury.…
I hope that the Minister will clear up the position when he replies.
Clause 3(2) deals with the establishing of the fair price in relation to imports from Communist countries. It makes statutory a test similar to the test quoted in the letter from the right hon. Member for Sheffield, Hillsborough (Mr. Darling) from which I read an extract. What puzzles me is that the hon. Member for Exeter (Mrs. Gwyneth Dunwoody), in Committee, said that the British manufacturer will be better off under the Clause than he has been in the past. If the statutory test in Clause 3(2) is more or less the same as the test which has been applied in the past, as explained by the right hon. Member for Hillsborough, how will the British manufacturer be better off?
Secondly, if it is necessary to show material injury if proceeding under the Bill, about which there is no dispute, but it is not necessary to show material injury if proceeding under the bilateral


trading arrangements, how can the British manufacturer be better off in that case?
Thirdly, the hon. Member for Exeter said:
This subsection will enable us to establish such a case and, therefore, take anti-dumping action by duties, which are becoming more appropriate to our trading relations with the Eastern bloc countries."—[OFFICIAL REPORT, Standing Committee E; 7th May, 1968, c. 46.]
I should like the Minister to explain why the Government believe that duties are becoming more appropriate. That statement by the hon. Lady implies some change in Board of Trade policies. I hope that we can have a clear statement about what the Government intend. Is it the Government's intention still to deal with allegations of disruptive trading by the Communist countries in the context of our bilateral trading arrangements?
I believe that British industry would be far from satisfied with a situation in which material injury had to be established in cases in which goods from Communist countries liberalised from quota were sold at unduly low prices in the British market. If it is the Government's intention to rely solely on the statutory provisions and to continue to insist that when they are doing so material injury must be shown, I cannot see how British industry will be better off.
The second main subject with which I wish to deal is the clause which gives the Government power to make a provisional charge once a prima facie case of dumping and of material injury has been established. As the Minister made clear, this is particularly relevant in relation to farm produce. When talking about that, I must declare an interest. I welcomed very much the mention made by the Minister about agriculture and horticulture. He rightly said that one of the problems in this case is the seasonal nature of the trade. But it is not only the seasonal nature of the trade that is relevant, nor is it only a question of giving the Government power to forestall exporters who might rush in with dumped exports in anticipation of action by the British Government. The problem is more serious than that, and it is getting worse.
The dumping of agricultural produce in this country which is now going on has, I believe, reached the level of a scandal and an outrage. The fact that most of

the dumping countries are our friends does not, in my opinion, make it any better. For example, the subsidy on French cheese is more than twice as much as its price when imported into the United Kingdom. The price in the Common Market is £528 per ton. The price when imported into the United Kingdom is £182 per ton. So the subsidy is £386 per ton.
I could give figures of similar magnitude for dumping by half a dozen other countries. As I say, the situation is getting worse. All this is happening at a time when the Government have called for more home beef production which, as they have recognised, means more milk, because one cannot have one without the other, and when our own production of liquid milk and milk products taken together is less than our total imports of milk products. It comes at a time when the Government are calling for extra efforts to improve our balance of payments.
The situation is also serious in relation to cereal imports. French wheat is imported into this country at a price which is half that at which it sells in the Common Market. That is simply because of the Common Market system of subsidies.
It has become clear that the Common Market countries are prepared to use their guarantee system in such a way that they will undercut us in our own market without limit. This creates a new and serious situation which will continue to get worse unless the Government take action. I believe that it is long past the time when they should have done so.
Three tests are required to be satisfied before anti-dumping duties can be imposed. First, there must be dumping. The Ministry of Agriculture, in a White Paper last year dealing with entry into the Common Market, admitted that dumping was taking place in relation to dairy products. The situation has got worse since then. Austria, which supplies half our whole milk powder imports, subsidises them by over £150 a ton. Imports of milk powder from Austria have gone up from 2,300 tons in 1961 to 12,100 tons in 1967. Belgian butter is subsidised to the extent of £636 a ton. These figures relate to the


period January to March this year. The position has deteriorated since then.
The second test is material injury. It seems clear to me that there must be material injury to producers of all kinds of dairy products, because the subsidised imports reduce the full price which the dairy fanner receives and, in a more direct way, the manufacturers of milk powder and cheese, for example, are adversely affected by cheap dumped imports. The Milk Marketing Board estimates that, assuming present prices for skimmed milk powder are held for the rest of the year, the market losses in 1968–69 on United Kingdom skimmed milk powder will be about £3¼ million.
Concerning cheese, which is in a worse situation still, Australian cheese has recently been reduced by £30 a ton, and English cheese prices are naturally expected to decline in consequence. If the fall averages £30 a ton for the year, which gravely underestimates the likely decline, the market loss on United Kingdom cheese will be about £3½ million.
As a result of devaluation, cereal producers could have expected an increase in cereal prices, but producers who sold wheat forward in, say, November, on an open price contract are getting less now than they would have got if they had sold at that time. This is because of dumping. This is making nonsense of the establishment of a home grown cereals authority, and it is making nonsense of the incentive which the authority gives to growers to store their grain.
We are now almost at the beginning of a new cereal year, and the Government have done nothing so far to remedy that situation. As a result of their dilly dallying, the whole 1968–69 harvest season for British cereal growers will be at best confused, and at worst chaotic. There is no doubt that this situation causes material injury to British cereal growers, for reasons which were explained in Committee, and into which I need not go again today.
The third test is that it should be in the national interest that anti-dumping duties should be imposed. It is true that the main dumping countries are our friends, and it is also true that they import a lot of our manufactured exports, but I do not believe that there is any

advantage for this country in being spineless and not standing up to dumping of this outrageous kind. Nor do I believe that there would be a serious risk of retaliation if we acted reasonably to protect ourselves in this situation. Most of the countries which are dumping agricultural produce have a favourable balance of trade with us.
The continuation of the present situation is of no advantage to the British consumer. It does not seem that lower import prices for agricultural produce are reflected to any significant extent in the high street. Nor can it be in the long-term interest of that consumer that British producers of grain and dairy products should be seriously damaged. Nor is it in the interests of the taxpayer that vast sums should have to be paid in deficiency payments on grains as a result of foreign dumping.
I believe that something must be done. We have made it clear that we would deal with these problems by a system of variable levies—

Mr. Speaker: Order. The hon. Member must talk about this Bill and not another one. We are on Third Reading. We cannot discuss alternative methods of tackling the problems which the Bill tackles.

Mr. Blaker: Mr. Speaker, I accept your Ruling. I was simply making the point that it was a pity that this method had not been adopted by the Government. It remains the fact that they have denied themselves this weapon, and, therefore, they must look to the other methods which are available to them.
I hope that they are doing this. I hope that the Minister can assure us that the Government will take action, because the present situation is that this country has become the world's biggest dumping ground for agricultural produce from many countries. I hope that the Minister will tell us how the Government propose to deal with this situation, and when, because action is needed, and needed fast.

12.15 p.m.

Mr. A. H. Macdonald: I do not want to be too specific during this Third Reading debate, so I shall just say that I am thinking in particular of the pulp and paper industry, following


representations made to me by a firm in my constituency.
I understand that before the Bill was introduced the procedure was that if a firm or industry made a complaint alleging dumping it was necessary for the firm or industry to make out a prima facie case and submit it to the Board of Trade. In other words, the Board of Trade did not itself take the initiative in the matter, and I think that that is reasonable. But I understand also that it was necessary for the firm or industry making the allegation to substantiate it in some detail, and in some cases that was rather difficult because it did not have the facilities or resources to make the necessary inquiries abroad.
Can my hon. Friend assure me that the Bill will give the Board of Trade authority to be more forthcoming than it has been in the past in assisting firms to make inquiries once a prima facie case has been established, and that if it does, the Board of Trade will exercise that power in such cases?

12.16 p.m.

Mr. Richard Body: We welcome the Bill, but we regret that it does not go far enough to support agriculture. This is still our greatest industry, yet it is the one which is most vulnerable to dumping. As my hon. Friend the Member for Blackpool, South (Mr. Blaker) said, we are the world's biggest dumping ground for agricultural produce.
Dumping tends to be seasonal. The result is that produce, particularly from Europe, has been coming to this country over a period of a few weeks and there has never been time for any of the existing legislation to be used to deal with the problem. Prompt action is necessary to check the dumping of farm produce. The Bill goes some way towards doing that, but it does not go nearly far enough, and we must therefore regard the Bill as no more than a stop-gap measure until such time as the President of the Board of Trade and the Ministry of Agriculture, Fisheries and Food introduce a system of variable import levies and thereby have true control over the import of foodstuffs.
There is no reason why we should not be able to produce in this country three-quarters of the temperate foodstuffs

which we consume, but I doubt whether the Bill will do anything to encourage farmers towards that end. It is too late in respect of a number of commodities.
To single out one, potatoes are perhaps the most important crop grown in Lincolnshire and East Anglia. This year growers have increased their acreage of early potatoes by 5,000 acres, yet this week we are importing huge quantities of "earlies" at a derisory and dumped price. I am told that this week some early potatoes are leaving the farms at £10 a ton, which is a ludicrous price, and one which will put most growers out of pocket, yet potatoes from Cyprus and other countries are still being allowed to come in. One estimate which I have is that this year 500,000 tons of potatoes fit for human consumption will not be sold for human consumption. This is a huge amount, and results entirely from the Government allowing potatoes to come to this country at a time when we are quite capable of growing our own. It is an absolute tragedy that there should be such a waste of food.
The Bill is also largely too late to deal with the egg-dumping problem. This matter has been raised on many occasions in the House and we have been repeatedly told by the Government that only 2 per cent. of our eggs are imported. The important fact is that this 2 per cent. importation is seasonal—it comes in a certain period of the year, forces down egg prices, and causes a great loss of profit to farmers. I hope that the Board of Trade will bear in mind the fact that the import of egg products lept by nearly 300 per cent. recently. Farmers cannot compete against this sort of thing.
My hon. Friend referred to the question of dairy produce. Here again there is need for urgent action by the Government. They should check the dumping of dairy produce. Europeans have cottoned on to the idea of manufacturing English-type cheese and exporting them to this country with a subsidy of £386 a ton. Our farmers cannot possibly face that kind of unfair competition.
We are spending about £3 million a day on imported food. This is a severe strain upon our balance of payments. Much of it could be saved by increased production by our own farmers. They are willing to do it, and they will do it if they can have confidence. But they will


never have confidence unless the Government introduce a Measure more severe than this to check dumping and unfair competition from abroad.

12.22 p.m.

Mr. Mallalieu: I should like to deal—

Mr. Speaker: The hon. Member can reply to the debate with the leave of the House.

Mr. Mallalien: I ask the leave of the House, Mr. Speaker, and hope that it is granted.
I want to deal with some of the points which have been raised, and first with the problem referred to by my hon. Friend the Member for Chislehurst (Mr. Macdonald), namely, that of the pulp and paper industry. I assure him that we ask an industry only to provide prima facie evidence of dumping or of material injury. Once that has been established it is the duty of the Board of Trade to accept the full burden of proving whether or not dumping is taking place. But we expect the industry concerned to make available all the facts about its own activities in order to support the contention of material injury. The Bill makes no particular change in this regard; once a prima facie case is made out, we already have the duty of proving the full case.
There is some difference, to the extent that we have latterly had an increase in staff available to investigate prima facie cases, and I hope that, as a result, examinations will be carried out more speedily in future.
Both the hon. Member for Blackpool, South (Mr. Blaker) and the hon. Member for Holland with Boston (Mr. Body) expressed great anxiety about the position concerning various agricultural and horticultural products. They probably both recognise that the provisional action powers contained in the Bill will strengthen the arm of the Board of Trade in dealing with cases where there seem to be both dumping and material injury. I can assure them that we shall use these powers effectively and rapidly, provided always that the industry concerned comes to us at the earliest moment with all the evidence it has.
As for cheese, we have been having discussions with the Milk Marketing Board and the National Farmers' Union about the general problem, but recently, at any rate, there has been no application from these bodies for anti-dumping or countervailing measures. Again, I would point out that if the industry will do its part we shall do ours.
The hon. Member for Blackpool, South asked how our interests would be better provided for under the Bill in dealing with possible dumping from countries of the Eastern European bloc. In the past we have dealt with such imports in the context of our bilateral agreements. I believe that the hon. Member is under some misapprehension in this respect. In taking action under the bilateral agreements we take notice of the question whether or not material injury has been caused. I am advised that that has been the practice for many years. If any confusion has arisen as a result of correspondence which I have not seen, I should like to clear it up. The fact is that material injury is a factor to be considered under the terms of the bilateral agreements.

Mr. Blaker: I am obliged to the Minister for dealing so clearly with this point. Can he say whether it has been a practice to apply the material injury test with the same severity in the case with which he is dealing as it has been applied when action has been taken under statutory powers?

Mr. Mallalieu: I understand that that is so. Not only the actual causing of material injury but even the threat of material injury has been a factor for consideration. The situation in respect of material injury will be precisely the same under the Bill as it has been in the past, but the new method of comparing prices for anti-dumping purposes will make severe action much more likely and much easier in the future.
In spite of the strictures of the hon. Member for Holland with Boston concerning the shortcomings of the Bill I understand that even he welcomes it as a step forward, and I gather that that is the general opinion of the House. As I did in the Second Reading debate, I give the House the assurance that if a prima facie case is made out we will, as speedily as possible, try to get the


facts to establish a full case and, if a case is established, we shall act. In the meantime, if there is disruption or material injury we shall use the provisional powers with great vigour.
With that explanation I hope that the House will give the Bill a Third Reading.

Question put and agreed to.

Bill accordingly read the Third time and passed.

DOUBLE TAXATION RELIEF

Mr. Speaker: I have had a word with the two Front Benches about the next 10 Orders. Order No. 8—the one referring to Portugal—is wider than the others, but both Front Benches have agreed that it would be convenient if we discussed together all the Orders down to No. 12 on the Order Paper.

12.30 p.m.

The Financial Secretary to the Treasury (Mr. Harold Lever): I beg to move,
That an humble Address be presented to Her Majesty, praying that the Double Taxa-ation Relief (Taxes on Income) (Antigua) Order 1968 be made in the form of the draft laid before this House on 10th May.
I am grateful to you, Mr. Speaker, for conveniencing us by enabling us to deal with this unusually large batch of Orders together. They can conveniently be so discussed. The agreement with Portugal is a new, comprehensive agreement and I will say something about it separately. The other nine are all to amend existing agreements to withdraw from portfolio shareholders the credit which they have hitherto enjoyed for tax on the profits of the company paying their dividends. The agreements are similar to agreements with eight other Commonwealth countries which were approved by the House earlier this year and I need to make only one or two new points.
The first is that the two agreements with Antigua and St. Vincent expressly exclude from the benefits of the principal agreement companies which take advantage of special provisions of the tax law of those countries, enabling companies, at the cost of becoming liable to a merely nominal rate of tax, to acquire a fiscal residence in those countries and to use those countries as tax havens and there-

fore take advantage of the double taxation agreement to escape virtually all tax on United Kingdom dividends. The object of our double taxation agreement is to prevent taxpayers paying two lots of tax and it is certainly not our intention that they should be used to ensure that the taxpayer pays virtually no tax at all.
In the making of agreements with these countries, we have taken that into account and in making agreements with other countries offering equivalent tax facilities, we intend to ensure that those who make use of these facilities do not benefit from the double taxation agreements. This would be agreed on both sides, I think.
The second point is that, in each agreement, the withdrawal of credit from portfolio shareholders is expressed to take effect from 6th April last. The date was chosen to coincide with the date for the withdrawal of the corresponding unilateral relief. These agreements are part of a large batch of amending agreements which were put to Commonwealth Governments last year and it was hoped that they would all be in force by this April. In the event, although the amending agreement was signed on or before 6th April, it was not possible to complete the subsequent formalities in time to give effect to the agreements by April of this year. So that the withdrawal of the relief shall not be made retrospective, the Inland Revenue will, in practice, allow credit in respect of any dividends paid from those countries before the agreements come into force. There will be no retrospective effect.
The Convention with Portugal is the first comprehensive double taxation agreement with that country, although a limited agreement was made in 1961, providing for the reciprocal exemption from tax of shipping and air transport profits. The new Convention is based on the model Articles which the O.E.C.D. recommended member countries to adopt, and, as it follows generally the pattern of our other recent conventions, I will not weary the House with a detailed summary.
However, there are two points which I should mention. The first is the withholding taxes. The Convention provides, as a general rule, that the tax which can be charged in the source country is limited to 5 per cent. for royalties, 10 per


cent. for interest and 15 per cent. for dividends—although there is a reduced limit of 10 per cent. in the case of dividends received by a company with a holding of 25 per cent. or more in the paying company.
Second, Article 22 is the Article under which we give credit to people resident here for tax paid in Portugal. It provides for credit not only for tax actually paid in Portugal, but also for so-called "matching credit" that is, credit for tax "spared" in Portugal to encourage development there.
I hope that these new agreements will meet with the approval of the House. If there are any points which. any hon. Member wishes to raise on this somewhat abstruse area of the tax law, I will do my best to answer them.

12.35 p.m.

Mr. Patrick Jenkin: The Financial Secretary and I are becoming accustomed to debating these thrilling matters in an almost empty House, but I find it slightly intimidating to be accompanied on this occasion by my hon. Friend the Member for Finchley (Mrs. Thatcher), who is perhaps the one hon. Member who will understand what we are talking about.
I am grateful for the hon. Gentleman's explanation and I also will deal first with the Commonwealth Orders which, as he said, represent the largest group which we have ever considered together in this current spate of re-negotiated agreements.
The Orders make it clear that there will continue to be relief for the underlying tax paid by companies operating in these countries in cases of direct investment, which is defined as where the United Kingdom company holds 10 per cent. of the shares of the voting rights in the overseas company. But we are dealing in every case here with territories which operate a system of company taxation which does not provide for any withholding tax from dividends. As a result, in these cases, there is to be no double taxation relief at all for portfolio investors in those countries.
The double taxation paid by the companies operating in the overseas territories is paid in the form of a tax on the company's profits, and although some of the countries operate a credit system

and some simply pay their dividends free of any further tax, the result for the United Kingdom portfolio investor is the same, namely, that none of the tax paid by the overseas company qualifies for relief from double taxation when it is received in this country.
This circumstance was discussed in our debates on the 1966 Finance Bill, when we were dealing with unilateral relief on what was then Clause 28, which became Section 30 of the Act. I moved an Amendment to the effect that, in the circumstances envisaged, unilateral relief should be granted on the principle that half the tax paid by the company in the overseas territory should be regarded as of the nature of a withholding tax and should, therefore, be eligible for relief against the taxes payable on the dividends in this country.
The relief which I then sought was refused by the then hon. and learned Gentleman the Financial Secretary, the hon. Gentleman's predecessor, but I should like to quote what he said:
Obviously, there may be such varieties of circumstances and rates of tax that any attempt to take a proportion—a half or any other—of the profits, would result in an anomalous situation. The right way of dealing with this would be to withdraw the unilateral relief. But, of course, we shall be negotiating double taxation agreements in nearly all cases with the countries concerned. The substance of the hon. Member's argument is something which may well have to be considered in arriving at an overall settlement in those agreements as to what is right and fair.
The hon. and learned Gentleman went on to say:
I can give the assurance that, in the sense that it affects both the overseas countries and our investors in those countries, our negotiators will adopt a reasonably flexible approach to the question."—[OFFICIAL REPORT, 21st June, 1966; Vol. 730, c. 519.]
Here we have the results of what the hon. and learned Gentleman was then pleased to call "a reasonably flexible approach", and the result, as the hon. Gentleman will recognise, is precisely nothing. There is to be no relief whatever for portfolio investors in this situation.
Here we are dealing with investors in under-developed countries of the Commonwealth and in developing countries —Antigua, Cyprus, Dominica, Sierra Leone, Zambia, Gambia. Malawi, St. Lucia and St. Vincent. These are all


countries clamouring for investment to promote their development. The effect of the Orders is to eliminate double tax relief for portfolio investment by British investors.
I regard that as a highly unsatisfactory situation. It is certainly not the result which any reasonable person was entitled to expect from what the then Financial Secretary said in the debate in 1966. The present incumbent of that office, whom we all admire, owes the House some explanation of how it has come about that what was intended to be a reasonable and flexible approach has resulted in nothing at all.
I turn to the Portugal Order. Like the hon. Member, I wish to raise only a couple of points, in my case both on Article 22. There is a most surprising omission from the Article. It is fair to say that this is the first of the modern double-tax conventions where this omission occurs. It is that there is nothing whatever in the agreement about the giving of credit for underlying tax in the case of direct investment.
Why should that be? It seems a surprising state of affairs. Is it the intention that in the case of direct investment in Portugal, unlike any other country with which we have treaty obligations or any other country which is covered by the provisions granting unilateral relief, there is to be no relief for underlying tax? Or is it that the case is to be dealt with as though there was no agreement because the agreement is silent on the point? In other words, is it the case that for direct investment the matter is to be treated as qualifying for unilateral relief so that the rules applicable to unilateral relief for underlying tax are to apply? If that is so, the Financial Secretary will appreciate the consequence. For it is only where the direct investment amounts to 25 per cent. of the holding in the Portuguese company that that will apply.
I know that there have been some exceptions, but the general pattern has been that in the case of Commonwealth countries and of treaty relief countries, the test whether an investment is a direct or a portfolio investment is whether the holding of the British investing company in the overseas company amounts to 10 per cent. For countries which are

neither in the Commonwealth nor have treaty relief arrangements with us, the figure is 25 per cent.
In 1966, I moved an Amendment suggesting that as the number of countries with which we have treaties increases, so the number of countries to which the 25 per cent. figure applies will be diminished. In the circumstances, I suggested, the time would shortly come when it would be inappropriate to try to draw this distinction between the 25 per cent. cases and the 10 per cent. cases and that all should be put on the 10 per cent. basis.
Here we have a case of a treaty relief with an important trading partner—Portugal, I remind the House, is a member of E.F.T.A.—in which, if the matter is as I understand it to be, it is to be dealt with as though it were a case for unilateral relief, which means that a direct investor in Portugal will get the relief only if his shareholding amounts to 25 per cent. of the whole. Why should Portugal be treated in that way, which is less favourable than the treatment, shall we say, of Finland, another member of E.F.T.A., with whom an agreement was recently announced? Why is it felt that direct investment in Portugal is less worthy of encouragement than direct investment in Finland?
My other comment on this treaty is of a rather more benign nature in that I note with pleasure that in this case the Government have been able to concede, for the benefit of Portugal and of the British investor in Portugal that there should be relief for what the Financial Secretary called tax paid—taxes which are deemed to have been paid by the company in Portugal, but which have not been paid because relief is granted under special circumstances by the Portuguese tax authorities. That provision is welcome and goes some way to offset the disadvantages from which investors in Portugal suffer as a result of the application, as I mentioned earlier, of the 25 per cent. rule rather than the 10 per cent. rule.
Here again, we are bound to ask why there are differences in agreements which cover different countries in respect of which we might have thought that similar treatment would have been sought. The Financial Secretary will recall that three or four months ago we debated the new comprehensive agreement with Australia and that on that occasion I


made a number of criticisms of the extent to which that agreement had swung the balance of advantage substantially in favour of the Australian Government and of Australian investors in Britain to the detriment of the British Government, the British taxpayer and the British investor. One of the points to which I then drew attention was that all the provisions for pioneering which the Australian Government were pleased to grant to encourage new investment in their rapidly developing country were being denied to British investors.
Here we have a case of a country— Portugal—not in the Commonwealth, a country with which, from an investment angle, we have much less direct association, both historically and emotionally, than we have with Australia; and yet with that country we have an arrangement which allows the British investor the advantage of the pioneer tax reliefs which were not granted in Australia. What is the motive and the rationale of that difference? Presumably it is deliberately sought by the British negotiators when they draw up these treaties.
I must tell the Financial Secretary that I shall not be satisfied with the stock answer, "The hon. Member must take the agreement as a whole. We get the best terms we can." That is not good enough in a specific case such as this, in which we are dealing with important advantages which are available in respect of Portugal but not in respect of Australia, where, surely, the Government ought to have been able to arrange similar relief for British investors.
If the Financial Secretary would answer those questions, then, despite the misgivings which I have expressed, and despite the strong objections which I have on the Commonwealth agreement to the difference between the pledge—that is not too strong a word—which the hon. Member's predecessors gave in 1966 and the results as we see them today, perhaps the responsible attitude for the Opposition to take would be that we should not seek to challenge these Orders in the Division Lobby.

12.48 p.m.

Mr. Harold Lever: I do not know whether I need the leave of the House to reply, but, in any event, I will ask for it.
I am sure that the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) is aware of the passionate general interest in these technical details by our colleagues. I can only conclude that many of them prefer to study these rather abstruse matters in HANSARD rather than to get them, with more difficulty, orally by presence in the House.
The points raised by the hon. Member are of wide general interest. He asked, first, why we have not provided some relief for British portfolio investors where there is no withholding tax which would produce that relief for them.
I agree that my hon. and learned Friend my predecessor undertook to look flexibly at these matters. The fact that a flexible approach has not resulted in these cases, in no concession having been thought to be necessary or desirable for portfolio investors, does not mean that the subject has not been considered. One must have regard to the tax systems in operation in the countries with which we are dealing and to other circumstances.
We must always remember that we are dealing with portfolio investments only. The amount of these investments in these countries cannot be very large, and I do not think that there will be any calamitous fall in the stock exchanges of Antigua, Santa Lucia, or Malawi as a result of this omission to provide withholding tax relief.

Mr. Patrick Jenkin: That is an amusing point, but portfolio investment and direct investment are terms of art which turn on the 10 per cent. concept. One can imagine cases which perhaps the hon. Gentleman and I would regard as trade investments but which, because they do not amount to the full 10 per cent., fail to qualify for the relief available. It is to these cases that the argument is principally directed.

Mr. Lever: As always in these matters, the hon. Gentleman is absolutely right, and I agree that the comment I have made does not wholly exclude the argument that we should have taken into account the possibility of smaller holdings being appropriate for some relief. We had regard to this in the course of the negotiations but we came to the conclusion, on the general basis of the tax systems prevailing in these countries and


the general circumstances of investment there, that no departure in regard to the general principle was desirable in these cases—the general principle being that relief for portfolio investments can arise only where there is a withholding tax.
I am sorry if that is a disappointment to the hon. Gentleman and I assure him that in any future negotiations the closest regard will be paid to the point he has raised. I will not use the word "undertaking" in this connection, because I am sure that the hon. Gentleman rightly expects his comments to be sincerely taken into account by our negotiators. We are satisfied, on these agreements, that there is no ground in any of these cases for departing from the general principle I have enunciated.
The hon. Gentleman wanted to know why we had not negotiated relief for underlying tax for Portugal but are relying solely on the unilateral relief which is available to those with a 25 per cent. or more shareholding. There is no provision in the model O.E.C.D. double taxation agreement for giving relief for underlying tax. It does not follow, therefore, as an automatic prima facie assumption, that we should always so arrange it.
While I would hate to use a stock answer, one must consider the matter from the point of view of the overall negotiations. The Portuguese did not deal with the question of relief for underlying tax and we therefore felt that it was not necessary that we should be bound to do so. There will be relief, which seems adequate in the circumstances, where there is a 25 per cent. shareholding, for the underlying tax.
The hon. Gentleman then wanted to know why we had agreed to the taxes-spread point, although he welcomed it, and asked why we had not agreed to it in respect of Australia. Treading timidly on the borderlines of order, I might inform the hon. Gentleman that, in the Australian case, this action was part of the bundle of agreement and disagreement which finally produced the ultimate agreement. The Australians were satisfied with the agreement as it stood, and we had no reason to alter it. If I were to go into more close examination of the Australian agreement I would be called to order. I must, therefore, narrow my comment to welcoming what the hon.

Gentleman said about the granting of spread-tax relief in the case of Portugal; and if he wants to examine the Australian agreement more closely we will have to find a vehicle other than this discussion for answering his questions fully.

Mr. Patrick Jenkin: On the Commonwealth point, where the whole of the tax is underlying tax, will the hon. Gentleman look sympathetically at any Amendments which we might seek to table to this year's Finance Bill? I understand that this could be done unilaterally, as it were, without affecting our rights or obligations under the Treaty and which would grant some relief—

Mr. Speaker: Order. With all the good will in the world, we cannot now debate the Finance Bill.

Question put and agreed to.

Resolved,

That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Antigua) Order 1968 be made in the form of the draft laid before this House on 10th May.

To be presented by Privy Councillors or Members of Her Majesty's Household.

Resolved,

That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Cyprus) Order 1968 be made in the form of the draft laid before this House on 10th May.—[Mr. Harold Lever.]

To be presented by Privy Councillors or Members of Her Majesty's Household.

Resolved,

That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Dominica) Order 1968 be made in the form of the draft laid before this House on 10th May.—[Mr. Harold Lever.]

To be presented by Privy Councillors or Members of Her Majesty's Household.

Resolved,

That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Sierra Leone) Order 1968 be made in the form of the draft laid before this House on 10th May.—[Mr. Harold Lever.]

To be presented by Privy Councillors or Members of Her Majesty's Household.

Resolved,

That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Zambia) Order 1968 be made in the form of the draft laid before this House on 10th May.—[Mr. Harold Lever.]

To be presented by Privy Councillors or Members of Her Majesty's Household.

Resolved,

That an humble Address be presented to Her Majesty, praying that on the ratification by Portugal of the Convention set out in the Schedule to the Order entitled the Double Taxation Relief (Taxes on Income) (Portugal) Order 1968, a draft of which was laid before this House on 17th May 1968, an Order may be made in the form of that draft.—[Mr. Harold Lever.]

To be presented by Privy Councillors or Members of Her Majesty's Household.

Resolved,

That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Gambia) Order 1968 be made in the form of the draft laid before this House on 17th May.—[Mr. Harold Lever.]

To be presented by Privy Councillors or Members of Her Majesty's Household.

Resolved,

That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Malawi) Order 1968 be made in the form of the draft laid before this House on 17th May.—[Mr. Harold Lever.]

To be presented by Privy Councillors or Members of Her Majesty's Household.

Resolved,

That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (St. Lucia) Order 1968 be made in the form of the draft laid before this House on 17th May.—[Mr. Harold Lever.]

To be presented by Privy Councillors or Members of Her Majesty's Household.

Resolved,

That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (St. Vincent) Order 1968 be made in the form of the draft laid before this House on 17th May.—[Mr. Harold Lever.]

To be presented by Privy Councillors or Members of Her Majesty's Household.

REDUNDANT MINEWORKERS (PAYMENTS SCHEME)

12.58 p.m.

The Parliamentary Secretary to the Ministry of Power (Mr. Reginald Freeson): I beg to move,
That the Redundant Mineworkers (Payments Scheme) Order 1968, a draft of which was laid before this House on 21st May, be approved.
This Order establishes the scheme envisaged under Section 3 of the Coal Industry Act, 1967 for making payments out of public funds to mineworkers aged 55 or over made redundant between 17th July, 1967 and 28th March, 1971. It is, therefore, an important Order affecting, as it will, the interests of a large number of mineworkers. This is not the occasion for me to elaborate on the problems of the coal industry. The Government are fully alive to these, and it is an earnest of the Government's concern to alleviate the social consequences of the contraction in the industry that we have devised this scheme.
I must add, however, that the present energetic measures of the Board and of the unions are producing good results in productivity, and new marketing initiatives have given good grounds for confidence that in time we shall see a highly productive and economic industry concentrated in low-cost pits.
But despite Government measures to encourage the demand for coal, a future smaller market and increased productivity mean that manpower in the coal industry will continue to decline over the next few years. The 1967 Act deals, in particular, with the period to March, 1971, and it is with redundancies occurring in this period that the Order is concerned.
The rate of decline is dependent on a number of factors, some of which are not easy to determine: for example, productivity, the number of recruits coming forward, the number of men willing to transfer within the industry, and the rate of natural wastage to other employment.
It is easier to forecast for the shorter term, and this year the National Coal Board expects the rundown in manpower in the industry to be at the same rate as it was last year, when it was about 43,000. The Board has made successful efforts to redeploy men to the maximum


extent possible within the industry, but with a rundown of this size we are inevitably faced with some redundancy.
Most of the men likely to become redundant to March, 1971, will be 55 years of age or over. When the 1967 Measure was before Parliament, we thought that about 26,000 men in this age bracket, eligible for the scheme, might become redundant by that date, and that the cost to the Exchequer of the scheme now proposed would be about £28 million. I have already mentioned the difficulties in estimating so very far ahead the figures of rundown and redundancy, but it now seems likely that the figure of 26,000 may be too low and that on present information, a figure of about 33,000 should be substituted. The estimated figure of £28 million—

Mr. Peter Emery: Did I understand the hon. Gentleman to say, when dealing with this approach, that the majority of the men who would be falling for redundancy would be of the age of 55 and over? I should like to be clear on that point.

Mr. Freeson: That is what I said. It is not possible to give accurate figures, but that is the figure that has been expected during our discussions and debates here and elsewhere. I certainly confirm that that is what is expected.
As I was saying, we believe that a figure of 33,000 would be a more accurate substitution of the figure of 26,000 previously quoted and that, in the light of that increase, the estimate of £28 million may also increase. But the revised estimates depend, among other things, on the number of redundant mine workers successful in finding other employment. This figure, therefore, for the time being at any rate, still gives a good idea of the order of the cost of the scheme, and we are letting it stand. It is important to distinguish between what one might describe as permanent or semi-permanent redundancy and redundancy from the industry. There will be a period in which there may be movement before we can be more certain of the projected figure for the future than we are at present.
On the figure of £28 million, I should say two things. First, it is not a figure laid down in the 1967 Act itself as a limiting figure. Secondly, it is important

to remember that it is a gross figure. During the period of benefit under the Scheme, particularly when entitlement to an employment benefit is exhausted, the unemployed beneficiary, but for the scheme, would usually be entitled to supplementary allowance from the Ministry of Social Security. Thus, if we take account of that, we get a net figure, because of the scheme, of between £11 million and £12 million, as distinct from the gross £28 million.
I turn now to the main method of the scheme. In the very broadest terms, it is to assess the redundant mine worker's pre-redundancy earnings in the industry, to deduce from this a figure of take-home pay, and then to calculate a post-redundancy level of income at about 90 per cent. of his take-home pay. The benefit is then fixed at a level which, when added to flat-rate unemployment benefit at the rate for a married man, approximates to this target of 90 per cent. The table making up Appendix 4 to the Order is, in fact, a scale of these additional amounts. The benefit is payable for three years or until age 65, whichever is the sooner. If there are other State or industrial benefits which come into existence or are increased on redundancy, they are deducted from the scheme benefit.
The effect of all this is that the income of a redundant mineworker, who continues to be unemployed, will be maintained for up to three years at a level related to his previous earnings in the industry, but the constituent parts of this income will vary from time to time during the period of benefit as his entitlement to existing State benefits varies.
The scheme benefit is taxable. In assessing the target level of post-redundancy income to which I have just referred in round terms as 90 per cent., we have, in fact, fixed the figure rather above that level. This has been done deliberately so that, after allowing for tax on the scheme benefit, the income actually enjoyed by the beneficiary will be in the area, in the great majority of cases, of around 90 per cent. of previous take-home pay. Tax is not, of course, assessed on the State benefits, which at times are an important part of redundancy income.
The classes of eligible persons the scheme prescribes are industrial grades in


the coal industry, including under-officials, but not clerical grades, whether employed by the Board or by small mines licensees—I am sorry to be so complicated—working mines licensed under Section 36(2)(a) of the nationalisation Act, or employed as workmen's employees.
Employment at the time of redundancy will, in most cases, be at coal mines themselves, but the Order, in Appendix 1, prescribes classes of places used for providing services or facilities ancillary to the working of coal mines where redundancy, because of mines closing or a reduction in the number of persons employed there, will also make employees eligible under the scheme.
As to length of service, the scheme requires that a man shall have had 10 years' service in total, the last two of which must have been continuous. Thus, most people eligible for scheme benefit will also be eligible for a lump sum under the Redundancy Payments Act, 1965. But we have felt it necessary to admit to the scheme, in addition, first, those persons who transferred from one coal industry employer to another in the final two years of service before redundancy and, secondly, those who become redundant twice in quick succession in circumstances where the second redundancy does not entitle them to a lump sum under the Redundancy Payments Act. There will be only a few of these cases, but we felt it fair to provide for them.
In the Minister's general statement last July it was contemplated that redundant mine workers who benefited under the scheme would be entitled to pension at the end of the period of benefit whether or not they had then reached age 65. On considering closely the existing practices in the industry, it has been decided that those mineworkers aged 60 to 65 who already expected a pension of £1 per week under the mineworkers' pension scheme on redundancy may also be paid their pension immediately on redundancy and may also benefit under the scheme. But the weekly scheme benefit is offset by the weekly amount of mineworkers' pension.
In the case of superannuable grades, we have approached the matter rather differently. If the mineworker who is in the superannuation scheme accepts his

lump sum and monthly pension forthwith on retirement, the Order provides that he shall not be entitled to payments under the scheme. On the other hand, if he defers receipt of superannuation benefits, he will be entitled to payment of scheme benefits.
Special arrangements are made in the Order for superannuable grades who became redundant since 17th July last, but before the Order comes into force. These men could not have been expected to know the alternatives which I have just described. We have, therefore, provided that the superannuation lump sum already paid may be kept, but the superannuation running sums are recoverable against payments under the scheme.
Also, there is an offset in these cases against weekly scheme benefit, to allow for the advantage of retaining the superannuation lump sum. But for this the person in a superannuable grade redundant before the regulations come into force would be preferentially placed as compared with later redundants who will have to defer receipt of lump sum if they are to qualify for scheme payments.
There is one further consideration which arises largely in connection with persons already made redundant before scheme benefits are payable under the Order. Until a redundant mineworker's entitlement has been established and payments start he may be eligible to claim and receive supplementary allowance from the Ministry of Social Security. So when arrears of scheme benefit are paid there will be an adjustment for supplementary allowance which would not have been paid if scheme payments had been made weekly as they became due.
This will adjust the initial amount payable in arrears cases, although it will apply in other cases where receipt or establishment of a claim and the first payment is delayed, and where thus the mineworker is paid supplementary allowance. This will be in cases where there may be some discussion and possibly an element of dispute on claims made which will take a little time to resolve.
We are also introducing a rather special benefit for occupiers of coal industry houses in addition to the benefit I have just described. In certain cases, when a mineworker ceases to be employed, there may be an increase in the charge for a coal industry house. Sometimes this is in


the form of rent, sometimes a payment under licence. This was the subject of an Adjournment debate on 30th May last, when, in reply to my hon. Friend the Member for Consett (Mr. David Watkins), I said that this matter was being looked at, among other things, in preparing the scheme. It only remains for me to mention a few further points. Payment of benefit under the scheme generally speaking, ceases where there is no entitlement to unemployment or sickness benefit.
There is, however, one important exception to this principle. If a redundant mineworker gets work outside the coal industry or becomes self-employed, he will be entitled to receive the basic benefit described in Article 5 subject to a ceiling figure of 60s. per week. We feel that this is an encouragement to the mine-worker to seek re-employment and that to discontinue all benefit under the scheme would be wrong.
In the event of loss of the new employment the redundant person will revert to full scheme benefit. I know that my right hon. Friend's predecessor was approached on a number of occasions on this point. I can give the assurance that taking a temporary job will not permanently remove a person from the scheme.
On the other hand, if a redundant mineworker re-enters the coal industry, benefit ceases. The Order, however, provides that if a re-entrant again has to leave the coal industry he will resume scheme benefit without the weeks of reentry being counted against weeks of entitlement to benefit. Thus he would receive the balance of three years of benefit, subject to his reaching age 65 and to the limiting date of March, 1974, for scheme payments.
Mineworkers will need to claim for benefit under the scheme within 26 weeks of the date of the Order coming into force or of the date of his redundancy, whichever is the later. In cases where my right hon. Friend is satisfied there is reasonable ground for extending this period, he is empowered to do so.
We are grateful for the agreement of the National Coal Board to undertake the big task of administering the scheme. I know that a tremendous amount of preparatory work has been done. Both the Board—in a "pop" version centre spread in the June issue of Coal News

—and the union have prepared helpful simple question and answer guides on the scheme.
As I have explained, the amount of benefit payable under the scheme is related very closely to certain other State benefits. The necessary liaison between the Board and the welfare Departments has been established, so that due and proper payments can be made in a manner satisfying all the demands of good accountability.
In achieving the apparently simple objective of supplementing the pay of elderly redundant mineworkers we have encountered many technical problems. If hon. Members find my speech undoubtedly detailed, they will appreciate that the scheme itself is necessarily complicated, but it is not for me on this occasion to go into too great detail. This will be a matter for the operation of the scheme when it is actually implemented. But for the many technical problems I feel sure my right hon. Friend would have been able to lay the Order rather sooner than today. We have had close discussions with the National Coal Board and, in accordance with the undertaking given by my right hon. Friend's predecessor, with the mining unions.
I believe that the scheme before the House is a good one. It is an example of how to reshape an industry and the economy in a civilised way. For these reasons, I ask the House to approve the Order.

Mr. Will Owen: In recognition of the complexity of the scheme which my hon. Friend has outlined, what provision is made for an appeal committee or machinery to be set up to deal with the difficulties that undoubtedly will arise?

Mr. Freeson: There have been consultations between the Department and the National Union of Mineworkers. What is in mind, and the N.U.M. has agreed, is to create informal machinery such as is already operated where there are accidents at work requiring compensation payments to meet this kind of issue.
We are also in touch with the Department of Employment and Productivity to see if there is a possibility that industrial tribunal personnel might also serve


this purpose in an extra statutory capacity. The latter point has not been resolved yet, but we have resolved the principle and the N.U.M. has agreed that such machinery should be established.

1.30 p.m.

Mr. Thomas Swain: In 1947, on the nationalisation of the coal mines, 850,000 of those of us who worked in the mining industry clapped our hands, sang our mining songs at the headstocks, and pulled the flag to the top of the newly mounted flagpole and thought that we were approaching Utopia.
On 14th June, 1968 we are debating not the miners' charter which we in the mining industry were promised in those days, when there was talk of holidays with pay, good sickness benefits, better compensation, better housing, better conditions and shorter hours, but a charter of unemployment for the mining industry. It is a tragedy that the Labour Government, of which I have been a proud member for some years, should introduce a charter for unemployment in the mining industry, which has stood by the Labour Party through thick and thin for the last 60 years.
I should like to make certain criticisms about the delay in introducing this Order. Since the statement was made on 18th July, last year, 322 days have elapsed and many mineworkers have been made redundant. Unfortunately, many of those made redundant are no longer with us—they have died in the meantime. Not all the delay has been the fault of the National Union of Mineworkers. The first draft of the Order must have been terrible if it has taken such a long time and so many detailed discussions for amendments to be made. Those who advised my right hon. Friend should have come into the Tea Room and discussed it with us and we could have given them some advice on how to proceed.
We welcome the general body of the Order, because, for the first time, some compensation for the loss of a job in the mining industry will be paid. The industry has had its ups and downs in this century, its manpower declining from 1,250,000 in 1913 to 340,000 now, a steep drop in a short time.
My hon. Friend made great play with the suggestion that the majority of the men made redundant would be over 55 years of age. These regulations will benefit only those between the ages of 55 and 65. Can my hon. Friend say how many men younger than 55 will be declared redundant in the three years up to the expiry of the Order? It would be interesting to know what the Government intend to do for those who are under 55 and who have already been declared redundant in mining areas where there is no alternative source of employment, particularly the grey areas which do not have development area status.
My hon. Friend gave an estimate of the number of men to be declared redundant and the number of men who will be leaving the industry. If he studies the age grouping of the industry, he will find that far more men are voluntarily leaving the industry between the ages of 35 and 45 than 55 and over. We are in danger of losing many men when the Minister's statement is broadcast on the wireless and appears in the newspapers tomorrow. We shall have an exodus from the industry which we can ill afford, and as a result the industry and the country will suffer.
In the discussions with my union about this matter, the issue of the overall take home pay, both in cash and in kind, was raised. In Committee on the Coal Industry Act, 1967, I discussed the take-home pay in kind. One of the main sources of this pay for the miner is concessionary coal. Under the 1965 Act, certain schemes allowed redundant men over 60 years of age to have concessionary coal, but the Order contains nothing about men now covered by existing agreements. It is the Government's responsibility to extend existing schemes so as to include men compulsorily retired at 65 in the concessionary coal scheme.
I have a mass of figures, but I shall quote only one, which is very relevant. In Derbyshire, the area about which I know most, the county coal agreement gave mine workers 10 tons 15 cwt. of concessionary coal per annum. At the average price of £10 a ton, that represents £100 a year.

Sir Gerald Nabarro: Tax-free.

Mr. Swain: Multiplied by three years, this means that men declared redundant at the age of 55 will lose £300 in take-home pay in kind. This is a terrible blow to the mining industry. Every industry in the country has some sort of perquisite. Even redundant chairmen of companies have certain "perks" of which they are very proud and of which they boast. I can remember the hon. Member for Worcestershire, South (Sir G. Nabarro) boasting about claiming all his Parliamentary salary as expenses. Members were then getting £1,750 per annum and he claimed every penny of it as expenses, while I was living on it.

Sir G. Nabarro: Will the hon. Gentleman give way?

Mr. Deputy Speaker (Mr. Sydney Irving): Order. I do not object to the hon. Member for Worcestershire, South (Sir G. Nabarro) replying to that, but I hope that hon. Members will not go beyond the limits of the Order.

Sir G. Nabarro: I would not dream of being ruled out of order. Miners' concessionary coal is and always has been tax-free, and rightly so. I do not quarrel with it. I interjected " tax-free " only because the 10 tons 15 cwt. per annum in Derbyshire at £10 a ton would represent £107 10s. tax-free, and for a man paying the full standard rate of tax, that is equivalent to approximately £170 per annum of earned income. I say that only to aid the hon. Gentleman, not to criticise him.

Mr. Swain: I am grateful to the hon. Member. Of course, 33 per cent. of the miners in the industry are lower-paid workers and 25 per cent. pay no tax, so that the figure comes down to only £107 10s.
I ask the Minister further to consider concessionary coal, because if a man's wages are being reduced by £170, as the hon. Member suggested, then the assessment is incorrect and unfair.
Miners in most of the counties are making a generous contribution from their tax-free concessionary coal to old-age pensioners' pools. In some cases, they are making a 25 per cent. voluntary grant out of each ton of concessionary coal to a pool for retired miners. Every county which is doing that, however, has now reached the end of what it can do

in making any more contributions, so the Government must accept responsibility and provide the finance so that men over 55 may have their coal.
I take up only one more point as I know that many of my hon. Friends wish to speak. Many men have positions as union officials and as members of local authorities. A man who is an official in his local lodge at one of the larger pits has a big job to do. Moreover, being a union official, he is likely to be interested in local politics and be a member of his council. As a consequence, he has to attend council meetings on, perhaps, two days a week, and, in addition, he may be away on trade union work for a couple of days a week. In the result, he may work on only one day a week.
If a man works on one day a week, that will be assessed in calculating his take-home pay for the week and arriving at the nine-tenths. After representations made to him by the union, the Minister has refused to look again at the question of local authority members. Between 1947 and 1951, the Labour Government and the National Coal Board did everything possible to encourage younger men coming up in the trade union movement to become members of local authorities, and I am glad to say that we had a fair amount of success in that. Again, therefore, I urge the Minister to consider the question of people who have to lose work because of their local authority responsibilities and trade union activities.
In giving a general welcome to the Order, with those few reservations and criticisms, I ask my hon. Friend the Parliamentary Secretary seriously to consider the points which my hon. Friends and I raise today, and to see whether something can be done, perhaps by the introduction of a supplementary regulation.

1.33 p.m.

Mr. Peter Emery: My first question is about housing. As I understand the Order, it is clear that a tenant or licensee may be allowed to remain for a time in a house, or a payment may be made in lieu. I wish to know whether the arrangement under the Order is the equivalent of present procedure within the National Coal Board. I have had a question put to me on this matter. It is


suggested that these are more favourable terms than those normally offered to anyone living in a Coal Board house. I do not know the answer, and I should like to know.
It has been argued in the House and elsewhere that this scheme is necessary because of the major run-down in the industry at present. In fact, there has been a massive relocation of men in coalmining over a long period. The hon. Gentleman the Member for Derbyshire, North-East (Mr. Swain) spoke about that. Here are some figures. From 1959 to 1962, the run-down in the number of miners was 144,000. During the last four years, according to the 1966-67 accounts, it was only 122,000.

Mr. Swain: Mr. Swain  rose—

Mr. Emery: If the hon. Gentleman will allow me to finish on this point, it may not be necessary for him to intervene.
This year, the run-down has risen to nearly—we are not absolutely certain of the figure—the same level as in 1960. I estimate that it is likely to be 50,000 or 52,000, which with the years 1965–67 will be within 1,000 of the run-down in the four-year period 1959–62.
I am not trying to make an unfair point. I wish merely to make clear that as high a run-down has been seen before, and previously it occurred without a redundancy payments scheme, without its cost of many millions of pounds. It is important that this be known, because the wrong interpretation is often given of the necessity for the present scheme.
Next, the question of miners who refuse to move. Earlier this week, miners were on strike about their redundancy payments in West Wales. I am informed that the men at the Cefn Coed pit, which was closing down, on a care and maintenance basis or at the clearing-out stage, had been offered other work at Abernant, a little way away from their present homes. They were on strike because they did not want to move out of their valley.
It is natural and understandable that people do not want to move out of their own locality, but all parties have always emphasised the great need for the mobility of labour. I have in mind such a case

as the one to which I have referred, where people are asked to move not out of their county but within a fairly small area.
I hope that the Minister will make clear that, while one is sympathetic, it would be wrong for payments under this Order to be made when people refuse to take up alternative employment on their doorstep or next door. If that is not made clear, there may well be great unfairness to other miners throughout the country. If the matter is not made clear to the industry and people do not understand that, although one sympathises, the regulations must be applied, we shall have more trouble later on. Indeed, we shall be encouraging trouble.
Now, the question of payments under the Redundancy Payments Act and under the present scheme. The president of the Nottinghamshire branch of the miners' union has made a statement suggesting that men were obtaining £500 in redundancy payments, taking up another Coal Board job starting from scratch, and then being eligible for yet another redundancy payment after being in employment for 104 weeks. Is this so? If it is allowed, it is a strange and unrealised fact. Society is rightly attempting to provide benefits under the Redundancy Payments Act and under this scheme—

Mr. Freeson: I am advised that that Press story has been withdrawn by the newspaper in question.

Mr. Emery: Then the statement made by the president has since proved to be not correct?

Mr. Freeson: Mr. Freeson indicated assent.

Mr. Emery: I am delighted, because such stories set people thinking and can lead to wrong impressions about the intentions of schemes such as this.
Lastly, I have been approached by people who claim that they were employed by a firm which, although not directly connected with the N.C.B., was totally employed on contract work for the N.C.B. With the closing of a pit, the firm has had to shut down. These people, one of whom had worked for about 20 years on this aspect of transportation, considered themselves to be amalgamated with the coal industry. I realise that


under the scheme these people would not qualify. Very few people would fall into this category.
If there were provision for appeal, in exceptional circumstances like this, where somebody's whole livelihood had been absolutely tied up, not consequentially in the village, but sub-contracting for the Coal Board, the employee—not the entrepreneur—might be able to receive some benefit. An answer on this point would be helpful so that the few people who might wish to attempt to appeal would know exactly where they stood. On the whole, we on this side welcome the Order.

1.43 p.m.

Mr. Edward Milne: The hon. Member for Honiton (Mr. Emery) put his finger on the pulse of some of the problems with which we are confronted when he related the figures for mine closures and redundancies for the late 1950s and early 1960s. Had we been presented with such a scheme at that period, many of the difficulties now being faced by mining communities would, to a considerable extent, have been mitigated.
We must welcome the Order on the basis that, although it does a tremendous job in cushioning the impact of redundancies and closures, in itself it is not an entire solution. My hon. Friend the Member for Morpeth (Mr. Will Owen) asked the Parliamentary Secretary about the question of some machinery in the areas to deal with the questions and problems which will undoubtedly arise on this exceptionally complicated Measure. The reply that there was some informal machinery to deal with this does not go far enough. In the coalfields, joint committees should be set up to iron out the difficulties which will undoubtedly arise.
My hon. Friend the Member for Derbyshire, North-East (Mr. Swain), in his admirable lead-in, dealt with the question of concessionary coal. Although this is a linked issue to the general problem of redundancy payments, it will, nevertheless, be a matter of tremendous concern in the mining areas. I hope that we shall receive some clarification on this issue.
It is difficult to deal briefly with the provisions of the Order. My hon. Friend the Parliamentary Secretary cleared up some points. This must be the first time that social security benefits have been

linked with the question of redundancies. This is some reflection on the payments which will be made.
I want to deal with the questions of alternative employment and of the right to work. These are the hinge points of the Order. As I said, the Order is designed merely as a cushion to deal with a difficult situation. In itself, it is not a solution. We are still endeavouring to introduce new industries in the development districts to deal with past redundancies. We do not want to be overburdened in the future with an increasing amount of redundancies and closures which will mitigate the effects of the tremendous work now being done in these areas to attract new industries and to create new jobs.
There is an impression in mining areas —there certainly is in the Northumberland coalfield—that too many officials at top level in the Coal Board are becoming closure-happy as a result of the scheme. Too often we have been given figures which have been too optimistic about the effects of the Order and of closures.
I ask my hon. Friend the Parliamentary Secretary to deal more specifically with the question of the benefits under the scheme and with the question of temporary work. What is the position of the person who is declared redundant, who is engaged on temporary work elsewhere, and who returns to the coalfield? We shall increasingly have many complications of this type.
I know that a number of hon. Members wish to take part in the debate and, bearing in mind that the time limit is severely restrictive and that it is taking place on a Friday, which is unsual for an important Order of this kind, I conclude my remarks by welcoming the scheme, again reiterating my plea for some sort of area machinery which can look at its operation in the early stages to ensure that it achieves the success that it deserves.

1.50 p.m.

Mr. David Crouch: I wish to make only a brief intervention, because I know that many other hon. Members wish to speak.
As the House will be aware, in my part of the country we have the Kent coalfield, and, although I make no special plea for a small area, I would remind hon. Members that we are considering a social problem involved in the massive


economic problem which we face in the run-down of the coal industry.
I welcome the Order because its terms recognise the social problem facing us, and they are terms which, in the main, are generous. However, there are some aspects of it which should concern us, and the principal one is that there is no provision for men under 55. In the Kent coalfield, there has been a good deal of recruitment in recent years with considerable advertising for miners.
Only last Wednesday, I was down one of the pits in the coalfield, and I spent some time discussing geological problems which they have encountered, and talking to the miners. Most of them were well under 55. Many were young men in their mid-twenties. It may be that there is no problem for a fit man of that age who is declared redundant in getting another job in an industrial area, but I would remind hon. Members that the Kent coalfield is not so situated. It is a long way from any concentration of industry, and 5,000 men are involved.
I do not suggest that the coalfield is in danger of jeopardy. Indeed, only this week one pit has had a jeopardy notice taken off it by the National Coal Board, and I was delighted to be in the coalfield when the news came through.

Mr. Swain: Can the hon. Gentleman say what is the official reason for the pit being taken off the jeopardy list?

Mr. Crouch: The reason is simple. When the jeopardy notice for three months was put on, it was a case of all hands to the wheel. Productivity went up nearly three times, thus making viable the winning of coal from that pit. I am sure that the House would wish to pay tribute to the efforts of those involved.
However, there are occasions when all hands to the wheel will not necessarily put the situation right. In the pit which I visited last week they face a geological problem which only engineering and mining skills can put right, as well as all hands to the wheel. I saw for myself how skill, hard work and sweat can overcome the problem in the Chislet Colliery. I believe that they will achieve success there. If they do not, either this year or in five years' time, and if the economics are not right, I am worried

about the situation which may face men who are well under 55 and who are made redundant in an area of the country where there is no other industrial employment available.
The mobility of labour is a philosophy to which I would subscribe, but we are discussing today a social problem within a massive economic one. In what is already a generous Order, I hope that the Parliamentary Secretary will bear that fact in mind and make it even more generous. If it is made slightly more flexible, he will be able to take into account the special considerations which may arise in such areas where redundancy may mean a man being unemployed for a long period.
This week, I have talked with miners whose morale is low because they are fearful of the future. No amount of hard work that they put in can put that right. I have high hopes that they will overcome the problem which they face, but I would like to think that their fears could be removed from their minds not only by the skill of their Board, their engineers and their own abilities to put the problem right but also by this Order having a degree of flexibility to allow for some payment to men under 55 who may be made redundant.
So often today in matters concerning pensions and payments of all sorts under social security plans, we tend to have the book thrown at us and to be told that a certain category of person cannot have extra benefit because to do so would offend the letter of the law. I hope that the Minister will recognise that, in a case where we are facing a serious and heavy social problem, some flexibility would help to encourage a recovery of the morale amongst men who are looking to the future.

1.56 p.m.

Mr. Clifford Williams: Although there have been criticisms of minor parts of the Order, I note that hon. Members on both sides have given a general welcome to it. I wish to add my own welcome and, at the same time, congratulate my hon. Friend on introducing this Redundant Mineworkers (Payments Scheme) Order. It goes a long way in its humane and not ungenerous financial arrangements to ease the burden of mine-workers who become eligibile and, as my


hon. Friend has said, the field of eligibility is wide.
Men at the pits and at a wide variety of prescribed places which number 22 and range from ambulance stations to training centres, waterworks, workshop stores and plant dep6ts will all be eligible. The scheme identifies the eligible person and brings in the small licensed mine employee. It assesses for all concerned pre-redundancy pay and fixes a target for post-redundancy income at about 90 per cent. of the take-home pay. I know that this has all been said already by my hon. Friend, but I think that it is worth repeating.
In traditional coal mining areas where pits have closed or will be closed and where, despite their great efforts, the Government have not yet provided alternative employment which in my experience is what mineworkers want, not only will the scheme give financial help, but in its application may remove some of the rancour and bitterness which men feel after years of service in a great industry and then become redundant.
After long service in the industry, like thousands more, I remember the savage treatment that we received when private owners not only closed collieries but complete areas and even organised some pits to work a few days a week to deprive men of their unemployment money. I shall never forget those days, and, today, when we compare the benefits of this order to men made redundant with what happened in days gone by, the House must applaud the realistic protection and humane consideration that it offers to mineworkers who are now or will become redundant in the near future.
I am glad to note that the promises made by the former Minister to N.A.C.O.D.S. and to the N.U.M., that there would be full consultation on the drafting of the scheme, has been carried out. My right hon. Friend the Minister of Power has followed the same procedure and has accepted some of the suggestions made by these important organisations who now declare themselves to be fairly satisfied with its final form. But I hope—and this is a minor concern—that, after further consideration and discussion, the question of concessionary coal will be resolved in a satisfactory manner.
Once again, in company with the N.A.C.O.D.S. and the N.U.M., I should like to express my complete satisfaction with the Order. I congratulate the Minister and the Parliamentary Secretary on it and wish the scheme every success. Indeed, it could be a pattern for other industries in future.

2.1 p.m.

Mr. Raymond Fletcher: I have tried to do some homework on this problem since I represent—and the fact that I represent such a constituency indicates the tragedy—a former mining constituency. Ilkeston was traditionally a mining constituency. The miners in that area are now in a very small and dwindling minority, and the full and painful impacts of the industrial changes which have produced the necessity for the Order have been felt with particular acuteness in that part of the country.
In welcoming the Order I want to underline some of the points that have already been made from both sides of the House. I emphasise that the Order is no more than, as it were, first-aid. One does not throw away a first-aid kit because it is not a full surgical kit; but it is, nevertheless, only first-aid.
The Order does not pretend to deal with the full-scale economic and social implications of pit closures. That is not entirely the responsibility of my right hon. Friend or my hon. Friend the Parliamentary Secretary. It is the responsibility of the Government as a whole. But this Order, dealing, as it does, with one aspect of the pit closure problem, has certain limitations and anomalies which have been detected by the eagle eyes of my mining constituents.
I do not propose to bore the House with the details of these anomalies. I shall pass them on to my hon. Friend in correspondence and they will, I trust,, be ironed out by him. The fact that these anomalies have been pointed out adds particular force to the demand which has been made from both sides of the House for adequate appeals machinery. It is obvious that this is essential in general, and from my correspondence and the particular cases which have been brought to my attention, it is even more obvious.
The second strand of argument I want to reinforce is that presented by my hon.


Friend the Member for Derbyshire, North-East (Mr. Swain). That is to have another look at the way in which pre-redundancy earnings are calculated. I am thinking particularly of those in the mining industry who spend a lot of time on trade union work. It is a peculiar characteristic that the practice of mining trade unionism has far more to do with the production of coal than corresponding trade union activities have with the production of other commodities and services in other industries.
Everyone will agree—and I am glad to see that my hon. Friends from the mining industry are nodding agreement— that at least 70 per cent. of an active trade unionist's time in the coal industry is taken up with matters directly concerned with the production and distribution of coal. This is a peculiar feature of mining trade unionism which ought to be, and I trust will be, taken into account when this vexed question is further discussed.
The next point I want to make has little to do with the Order, but I trust I may be allowed to stray for a few moments. I would emphasise that, although the Order applies to a group of men who are being rendered redundant and although it gives them something that cannot be described as a golden handshake or even as a silver handshake, but perhaps as a substantial copper handshake, it must in no way be understood outside this House that these men are of no further value to other industries.
Mining labour, as I have said again and again in this House, is absolutely first-class. It has two characteristics which should commend it to any employer. First, miners are admirable timekeepers and, secondly, they are accustomed, because of their mining employment, to work together efficiently in groups. These are two absolute essentials in modern industry.
With that brief footnote, I warmly welcome the Order.

2.6 p.m.

Mr. Robert Woof: Mr. Deputy Speaker, the House will no doubt recognise that the main principle of this Order is a scheme which concedes that

55 is an age at which men will have great difficulty in finding another job.
The Order has now been presented, after a delay of almost a year since the scheme was first announced. But we are in a position to say that the National Union of Mineworkers has been fully consulted on the drafting of the scheme and is fairly satisfied with its final form. Therefore, on behalf of the National Union of Mineworkers, we want to take this opportunity to express a sincere debt of thanks.
I shall not repeat what has already been said on the financial provisions of this Order, except to say that I believe this is not a day for throwing our hats up in the air with delight. It is not an occasion to evade the stark facts. It is the inconceivable turned conceivable, for the reason that it is not a long time since anybody, especially in the mining industry, would ever have visualised that such a scheme would be introduced.
The Parliamentary Secretary, in his opening remarks, referred to the rundown of redundancy in the industry. I realise the narrow scope of this debate, but I trust I will be allowed to say, in a few words, that, throughout various aspects of industrial life, it was well known that the energy needs of this country were almost entirely dependent on coal. It played a vital part in the economic life of the country. But almost overnight the intrusion of other sources of fuel and the scramble for markets has ultimately dealt the mining industry a heavy blow resulting in the slaughter of employment, and in that sense I regard this Order as the burial fees for the industry.
Ever since the scheme was first mooted in July last year, employees of the National Coal Board have been living with anxiety. Like the rest of my colleagues, I have received scores of letters from constituents expressing their feelings on the long delay in presenting the scheme. Time and time again I have had to explain the difficult task which confronted my right hon. Friend to include the various categories entitled to benefit. But what is really the desired aim of this Order is whether it will make an effective contribution to a solution to many of the human problems which have faced the mining industry for the past 10 years.
While having no other choice but to accept the Order, I must also register my disappointment, because, whatever it is intended to resolve in all good faith, the scheme is a direct outcome of the lack of any co-ordination of the fuel industries to ensure that the miners, and the coal they produce, would be given their rightful place in the economy of the country.
I must, however, give my blessing to the Order, even for the sake of being grateful for such a measure to avoid social consequences. Nevertheless, I have disturbing reservations for the great numbers who will lose their employment in the future acceleration of pit closures, particularly those who are in their fifties. Their working life will be guillotined, and that is the burden of our complaint about the approach to human factors in the struggle for a living.
I want to be quite frank with my hon. Friend the Parliamentary Secretary. I do not for one moment accept what he said in his closing remarks that this scheme will enable us to reshape the mining industry. I am firmly convinced that no redundancy scheme will ever solve the real issue. It will be solved only when, before pit closures take place, adequate and suitable employment is provided for the men who are displaced for evermore.
In the circumstances, we want to make it well known and quite clear beyond all reasonable doubt that the miners are not a privileged set of industrial workers because this scheme has been bestowed on them, whatever benefits they may get from it.
I regret that this is a narrow debate. That is all that I wish to say.

2.10 p.m.

Mr. David Watkins: Like my hon. Friend the Member for Blaydon (Mr. Woof), and, indeed, everyone who has spoken today, I welcome the Order. This is the greatest proposal to compensate those who are made redundant through no fault of their own which has ever been presented to the House to deal with the problems of any industry.
There are two matters about which I should like clarification. First, I should like my hon. Friend to explain the position of redundant. miners who occupy

houses owned by the National Coal Board. In his lucid opening remarks my hon. Friend referred to my interest in this subject, and reminded the House that we debated this issue during an Adjournment debate shortly before the Whitsun Recess. I have a fairly vivid recollection of that occasion. The debate was held in the evening when you, Mr. Deputy Speaker, my hon. Friend the Parliamentary Secretary, and I were the only ones present, and I thought that the emptiness of the House on that occasion in no way recognised the sheer brilliance of the debate.
For many reasons the Coal Board is the owner of a large number of houses in the coalfield areas, and it is customary for miners to occupy these houses. The conditions of the tenancy vary from coalfield to coalfield, but in the North-East, the area in which my constituency is situated, it is customary for an employee to occupy his house rent free. But when he becomes redundant the situation changes. For the first six months of his redundancy he is charged a nominal rent, which may be 10s. a week. After that the rent is increased, and he may well have to pay £2 a week. What is singularly unjust is that at the same time as he loses his job he has to start paying rent for his house.
The Order deals with that situation, but it sets a limit of 20s. on the amount of compensation which can be paid to miners who find themselves in that position. On the figures which I have quoted—and they are typical of thousands of cases in the North-East—it means that someone who, through no fault of his own, has to pay £2 a week in rent will receive compensation of only half that amount.
The next matter about which I seek clarification is the position of ancillary staff who become redundant because of the industry contracting. Appendix 1 of the Order lists a number of prescribed places of employment. Among these are estate and house maintenance depots. There is in my mind, and in the minds of many people, some doubt about whether the Order is applicable to redundant staff who are employed in such places.
I have reason to believe that the Coal Board is in some doubt about the position, and I have been approached by


one of my constituents to try to get the matter clarified. He has spent the whole of his working life on this side of the industry, and the Board is not prepared to say that although he is redundant he qualifies for payment under this Order. This emphasises the point made by my hon. Friend the Member for Morpeth (Mr. Will Owen) about the necessity for some kind of appeals machinery to adjudicate upon the interpretations which are likely to be placed on the Order.
I hope that my hon. Friend can clarify the two points which I have raised, first, how the Order will affect those who have to pay increased rents as a direct result of becoming redundant, and, secondly, the position of ancillary workers.

2.19 p.m.

Mr. James Griffiths: I join my hon. Friends, and, indeed, hon. Gentlemen opposite in welcoming the Order. Last year, when we discussed the Coal Industry Bill, in which these provisions were laid down, I expressed a personal preference for the way in which I should like to deal with the problem of redundancy. I declared my personal view that I would have preferred to see a pension scheme which was adequate or even generous for miners of 60 years of age. However, we now have this scheme, and I welcome it.
I do not want to go over what has happened in the past. It has been said that the mining industry is cursed by its memories. Speaking as an old miner, however, I can say that miners have a lot to remember. In agreeing to this Order it is very important for us to make it clear that we do not regard men as being dispensable when they reach the age of 55. That is one of the dangers of a scheme of this kind. That is why I would have preferred a pension scheme. In a sense, we are writing off men when they reach the age of 55. With our country facing its present economic problems it is important to realise that we need the skill, ability and service of men of 55 years of age.
We are continually pressing for alternative employment for the development areas, and I hope that this scheme will not be regarded by the Government or anyone else as an adequate substitute for that. The overwhelming majority of

miners would prefer a job which would enable them to provide a service and earn a reasonable wage. I therefore urge my hon. Friend to remember that we must continue to regard this as an urgent matter. I am glad to see that my hon. Friend the Minister of State, Welsh Office, is present. Although, compared with what has happened in the past this is a generous provision for miners, we must not regard it as in any way lessening our responsibility to provide alternative employment for men who have been rendered redundant.
It is inevitable that a scheme of this kind should be complicated. It is complicated, first, because the occupations to which it refers must be prescribed. As far as I know, those responsible for the Scheme, in consultation with those in the industry, have covered the whole area, but a few days ago I was asked a question about an establishment which, although not in my constituency, employs many workers who live in my constituency.
It is a coal preparation plant, formerly worked directly by the N.C.B. but now operated by a private firm working under contract for the Board. Some of the workers complain that they are not permitted to enjoy what they would have been enjoying if this preparation plant had still been operated by the N.C.B., namely, concessionary coal.
I hope that my hon. Friend will consider this question, which has been referred to already. Anybody who knows mining areas knows that concessionary coal is not merely an economic matter; it is deeply rooted in tradition. The provision of concessionary coal goes back many years, and I warn my hon. Friend that he had better be careful about this subject, because it can " raise Cain ". I can recall many heated disputes about it. I therefore hope that the prescribed list can be looked at again, and if it is found that, inadvertantly, a place which should be included has been excluded, the matter will be put right. The list is fairly comprehensive, but it may exclude some places which ought to be included.
The scheme provides for workers over 55 years of age and for collieries that are closed between certain dates prescribed in the Order. One of the main difficulties arises in respect of dates. Some men over


55 and others over 60 were rendered redundant by pit closures before the date in respect of which the scheme operates. Anomalies are inevitable in a scheme like this. I thank my hon. Friend and all those concerned for the carewhich has been given to the preparation of the scheme, but it is clear that some thorny disputes will arise and I want to add my word to those which have been uttered by my hon. Friends. I ask my hon. Friend the Parliamentary Secretary to convey to his right hon. Friend—I am sure that the N.C.B. and the N.U.M. appreciate this—that it is essential to establish proper machinery for adjudication and to make sure that it is not only fair but is seen to be fair.
A scheme like this can be ruined if it causes large numbers of men to feel aggrieved at being shut out without any chance of pursuing their claims or arguing their cases. My hon. Friend has said that consideration is being given to this matter, and he talked about informal machinery being used to decide disputes. However good such informal machinery may be, I do not think that it will be sufficient. I therefore hope that serious consideration will be given, in association with discussions with the N.C.B. and the N.U.M., to the possibility of devising machinery which will provide aggrieved persons with the right of appeal against a decision excluding them. I know that the scheme will be approved by the House, but we must do our best to see that it is carried out properly and that it serves its purpose.
Having been connected with mining all my life, the decline in the industry has always caused me to be torn between two emotions. I would like to see the day when there is no necessity for any man to go down any pit anywhere in the world to provide us with the fuel and energy that we need, yet we know that as the mining industry declines and pits close down something very precious is being lost to the country. The mining industry has produced wonderful characters and communities.
The scheme deals with one aspect of a very large problem—the way in which we should handle the decline in the industry in a civilized way. Most of my life in the industry was spent considering problems arising from the run-down of the industry. In South Wales, the industry was cut in half in 10 years, from the 'twenties to the 'thirties. In those

days the process took place in an uncivilized and brutal way. It is to the credit of my hon. Friend, the N.C.B. and the N.U.M., that they are ensuring that the problem is now being dealt with in a civilized way.
But this is only one of the problems. The major problem remains. The men in these communities need work, and we must not let the introduction of this scheme weaken our effort to see that these men are given an opportunity of continuing to make their contribution to the economy of the nation and to earn their own livelihoods.

2.30 p.m.

Mrs. Margaret Thatcher: We on this side, and the packed benches behind me, welcome this Order. I am sure that it is far better to have such a scheme to diminish the bad effects of change than just to try to keep mines open to produce coal which cannot be sold.
I always enjoy the speeches of the right hon. Member for Llanelly (Mr. James Griffiths), but I must disagree with him on one point. I do not think that the scheme shows that we are throwing men of 55 and over on the scrap heap. It admits that there are considerable areas where men over 55 will find it impossible to get another job. Starting from the point of realism, it tries to compensate them over a temporary period. I am the first to admit that it will, in any case, be difficult after the end of the three years and that this is a compromise Order. But I do not criticise it for that. Probably it was the only kind of compromise which would have been acceptable in present circumstances.
The right hon. Gentleman spoke also about alternative employment. We must recognise that, if a man is paid 90 per cent. of his net take-home pay for three years and that take-home pay has been very good, human nature being what it is, he will not dash at another job which offers him less than that net take-home pay. That is to say, if, under the scheme, he was drawing a good weekly income, say £20, even though for only three years, he will not jump at another job which offers only £18, £19 or even £20. The alternative job would have to be much


more highly paid to provide any incentive.

Mr. James Griffiths: I do not accept the hon. Lady's defeatist view of human nature.

Mrs. Thatcher: It is not a defeatist view and perhaps in this connection the strike which we heard about last week is somewhat to the point. I was very disappointed to read on the tape and in the papers that, as my hon. Friend said, 13 miners staged a sit down strike at Neath Colliery, because they were not sacked. They wanted to be sacked but they were offered alternative jobs in another colliery instead of having notices of termination of employment served upon them—

Mr. James Griffiths: This has been mentioned. This was not in my constituency, but I do know about it. There was a sit down strike at Cefn Coed, which is now all over and discussions are taking place between the N.U.M. and the N.C.B. about the offer of alternative employment 10 miles away at Aberamen. This is nothing to do with the scheme, and since the discussions are taking place about a settlement, perhaps it would be better if we left the N.U.M. and the N.C.B. to deal with the problem. Let us hope for a settlement and leave it there.

Mrs. Thatcher: I will respond to the right hon. Gentleman's invitation and leave it. I used it only to counter his argument that a man would accept alternative work even if it were less well paid than the 90 per cent. take-home pay under the scheme. I doubt whether he would—

Mr. Swain: Has the hon. Lady considered the other side of the coin? If there were 100 men at a pit over 55 and only 45 redundancies, is it not fair to assume that the N.C.B. would offer the redundancies to the lower-paid men and not the higher-paid men, since the latter will inevitably be better skilled or physically better able to do the job?

Mrs. Thatcher: I have always assumed —perhaps the hon. Gentleman will correct me—that there will not be alternative work for the more skilled men. That is broadly true in a number of areas —perhaps not in the East Midlands, but

in a number of areas, certainly in the Kent area and in some areas in Wales, we know that there will not be any alternative work for some time to come—

Mr. Speaker: Order. We cannot discuss redundancy in general on this Order, which is about the terms of redundancy payments.

Mrs. Thatcher: Of course, Mr. Speaker. I was referring to redundant miners who will not be able to get alternative work and therefore will be eligible for benefits under the scheme, which will be reduced the moment that they find alternative work, and who will not be eligible beyond the extent of 60s. a week if they find alternative work in the area and not with the National Coal Board.
I turn now to some details of the scheme. I notice what the Parliamentary Secretary said about the taxation provisions, but I have considered it in some detail and I must confess that, between the three Ministries concerned, the Ministry of Power, the Ministry of Social Security and the Treasury, they seem to have got it into something of a muddle.
Perhaps the Parliamentary Secretary will tell me if this analysis is correct. The redundancy payments as such, according to him, are taxable. Wage-related supplementary unemployment benefit and the flat rate unemployment benefit is not taxable, so over the period during which these benefits are payable, the following situation will apply. First, during the first seven months, that part of the take-home pay which is made up of redundancy payments will be taxable, that part made up of earnings-related supplementary benefit will be non-taxable, as will the part made up of flat rate unemployment benefit. At the end of seven months, the wage-related benefit will be replaced by redundancy pay, so the net take-home pay will be the smaller because, at that point, the redundancy pay will be taxable, whereas what it is substituting for was non-taxable.
We then go on for another period of months until the flat rate benefit runs out and that will then be substituted by redundancy pay. Therefore, at the end of that period, there will be another increase in tax, so although the amount paid out under the scheme will be the same, the taxation consequences will be


heavier at the end of the period than at the beginning. There is a further possibility—[Interruption.] Is the Parliamentary Secretary shaking his head? This is not difiicult—

Mr. Freeson: I was smiling.

Mrs. Thatcher: Well, I never smile at increased taxation.
There is another possibility. As far as I understand the Order, a person will be able to go out to work for up to 21 hours a week. That is as it should be. If one is in senior benefit, there must always be an incentive to help oneself. This will operate without the person concerned being docked of any redundancy pay. Does that mean that he will be docked of none? I know that he will be docked of none of his basic redundancy pay, but what about the rate which is equal to the flat rate unemployment benefit? Clearly, if one is receiving unemployment benefit, that will be reduced to the extent to which one is working during certain days of the week.
Does the Order mean that such a man can go out to work for 21 hours a week and receive no reduction in his redundancy, plus the amount equal to his flat rate unemployment benefit, or does it mean that the number of days that he is working will disqualify him for a certain amount of the flat rate unemployment benefit? One would like to know the answer, because one knows the provisions with regard to unemployment benefit, but it is a highly complicated Order. We will obviously consider with great care what the Parliamentary Secretary has said, but it seems to me that the taxation provisions and the 21 hours of work provisions are not easy for anyone to understand although the hon. Member for Derbyshire, North-East (Mr. Swain) may understand them. Perhaps there will be a number of teething difficulties in this Order and some of the anomalies will come out only when it has been in operation for some time.
Having welcomed the Order in general and pointed out one or two of the problems to which it gives rise, I should like to ask about one or two of the points which the hon. Gentleman raised. I thought that he said that, during the last year, the industry had lost 43.000 men. I have here his latest pink form which

shows that, on 27th May last year, there were 405,000 men in the mining industry —in fact, nearly 406,000—whereas, on 1st June this year, an equivalent week one year later, there were only 352,000. That, of course, is a loss of 53,000 and not of 43,000 men, on his latest figures which are available. So the rate of run-down is rather greater than his figure would have revealed to the House.
Does the Minister still stick to the figure which he gave for the cost of the scheme? He said that the scheme is likely to cost only £11 million net, the reduction from £28 million having taken place, according to him, because some of the difference is made up by the wage-related unemployment benefit. I think that the figure of £11 million net is far too low and that the scheme is likely to cost a good deal more. I do not complain about that, having welcomed the Order, because I would rather that we made generous provision for redundancy than have them working to produce coal which cannot be sold.
A further point arises from the dating of the Order. The redundancies which qualify come to an end on 28th March, 1971, which is very near the last possible date for a General Election. Does the Minister contemplate that the pit closure programme will be completed by that time?

Mr. Speaker: Order. We cannot discuss the pit closure programme on this Order.

Mrs. Thatcher: I naturally accept your Ruling, Mr. Speaker, but I thought that the Order arose from the closure of pits.

Mr. Speaker: It may arise from the closure of pits, but it deals specifically with the provision of redundancy payments under certain terms, and that is what we must discuss.

Mrs. Thatcher: Thank you, Mr. Speaker. Perhaps the Minister would answer the question which I asked earlier, which arose from his speech, in which he referred to the rate of run-down in the mining industry. Does he confirm that rate of run-down for the period up to 1971?
I do not wish to prolong my remarks. It is pleasant to have the miner Members


with us on a Friday afternoon. They, too, have been brief. The details of the Order must, I am sure, have been thoroughly worked out by the hon. Member for Derbyshire, North-East, and if the Government can get the Order past him, they can probably get it past the rest of the House.

2.42 p.m.

Mr. Freeson: I will do my best to deal with the points raised by hon. Members. Some of the points were stressed by hon. Members in succession, and if I do not pick them up point by point but deal with them as a group I hope that I shall be forgiven.
My hon. Friend the Member for Derbyshire, North-East (Mr. Swain), the hon. Member for Honiton (Mr. Emery) and others asked what would be the position for men under 55 years of age. The hon. Member for Canterbury (Mr. Crouch) asked the same question. It must be made clear that the scheme, as announced nearly a year ago by my right hon. Friend's predecessor, is intended to relate to and to deal with the problems of the older redundant miners and not with the problems of all redundant miners.
There is no question of the scheme being extended to deal with redundant miners under 55 years of age. That was made clear when the announcement was first made. It would be wrong of me to suggest or hint that there has ever been an intention to extend the scheme to miners under the age of 55.
Several hon. Members, led by my hon. Friend the Member for Derbyshire, North-East, asked me to review the decision about concessionary coal. The question of concessionary coal has been before the Department while the scheme has been under consideration. The National Union of Mineworkers has been making strong representations to the Coal Board that something should be done to maintain the provision of concessionary coal.
I am not sure whether my right hon. Friend dealt with the point at Question Time, but certainly, in correspondence, he said that unless the Board grant the concession which the N.U.M. have been urging upon it, the Minister considers that there is nothing which he can do in

the sense that it ranks for Exchequer help. It is a matter within the structure of the benefits which operate in the industry. I understand that the N.C.B. has stated clearly that it does not intend to accept a continued liability for concessionary coal, following redundancy. I admit that that is not arguing the position. It is simply stating what is going on.
My hon. Friend the Member for Derbyshire, North-East and other hon. Members asked about the provisions within the scheme for those redundant miners who have spent a great deal of their time as officials on trade union work. Reference was also made to those who have served on local authorities. In answer to a recent Question, as well as in correspondence, my right hon. Friend stated that local authority service cannot be taken into account. The point about miners who have been trade union officials and who have worked only part-time in the collieries is at present with the Department, and I cannot state this afternoon the results of their consideration of those representations.
The hon. Member for Honiton put the case of a person who had been fully employed with a sub-contractor who depended wholly on the activities of the colliery or collieries in the locality. When those collieries were closed, the redundant miners over the age of 55 would benefit under the scheme. He asked what would be the position of employees in 100 per cent. sub-contracting firms.
As he said, the scheme does not cover those people. I am sorry to disappoint him, but it must inevitably be the case that no such person will be able to use whatever appeal machinery is created to seek to be brought within the scheme unless he is at least prima facie eligible as a coal industry employee. The answer therefore is that employees of firms who are affected by closures cannot claim under this Scheme.
The hon. Member asked why the scheme has been introduced now when we have had redundancies on a similar scale in the past—if not regularly over the years, certainly at particular times. He overlooked the important factor which has been brought out on many occasions in debates in the House as well as elsewhere—that, while the rate of redundancy from one year to another may be no


higher, or little higher than, that of a number of years ago, it is taking place against the background of an already contracting industry. The scope for re-absorption within the industry is getting less and less. The problems of net redundancy, the true problems of redundancy, therefore, grow greater in proportion to the declining capacity of the industry. Even if the closure programme were not maintained at the present rate, the problem would increase in time. The increasing rate of productivity with new techniques, in a contracting industry, is bound to create greater problems even if we have the same rate of redundancy, statistically, as some years ago.

Mr. Emery: I agree entirely with that, and I did not make the point which the Minister is answering. I made the point that an argument had been put that the rate of redundancy was greater than ever before. That is not the case. Nevertheless, I accept the hon. Member's argument.

Mr. Freeson: Perhaps, if I am to use a fine term, I should have referred to the proportional rate of redundancy. In relation to the industry as a whole, it is greater and currently it is higher than it has been up to a year or two ago.
My hon. Friend the Member for Blyth (Mr. Milne) was the first to introduce the issue of appeals machinery—the subject was raised in many following speeches— and he urged the Minister to consider establishing statutory machinery for this purpose. The unions were approached by the Ministry and agreed to a scheme, which will be similar to the arrangements which have been operating in the past, for examining disputed cases under the Fatal Accidents Scheme.
Although I do not have first-hand knowledge of this, hon. Members will, I am sure, agree that this procedure has operated well in the past. The unions find it acceptable, as does my right hon. Friend, and it seems that this should be a generally acceptable arrangement for the future. I also indicated that the question of industrial tribunal personnel being able to act in this sphere in a non-statutory fashion was being considered by the Department of Employment and Productivity.
Perhaps the use of the word "procedure" is not apt in this respect because

the actual procedure is more informal. It is not specially provided for in the Order or the Act, but that does not make it any the less satisfactory in operation. I use the word to give the matter a special sense, and not to imply that it is statutory. It is more than merely a number of people sitting round a table discussing matters. There will be a definite procedure, although it is not in the Order or the Act. This question has been raised so frequently in the debate that I am sure that my right hon. Friend, when reading the OFFICIAL REPORT of this debate, will pay close attention to the points made in support of this plea.
My hon. Friend the Member for Blyth then hoped that the scheme would not be used as an excuse for stepping up closures. Although he did not put his question in that way, he used the phrase " closure-happy" as being characteristic of some parts of the industry in certain parts of the country. I assure my hon. Friend that there has been no such feeling in the Department, or at Board level in the industry. I also assure him that the scheme is in no way an easy method of increasing the number of closures. The closure programme is related to other factors and not to the fact that the Government are introducing a scheme of this sort.
My hon. Friend also sought an assurance—in fact, I gave it in my earlier remarks—about temporary work. I said earlier that a temporary job would not permanently remove a person from the scheme. I do not wish to go into this aspect in detail now because it is involved and because individual cases will be subject to the application procedure. I hope that my hon. Friend will accept this general assurance.

Mr. Milne: Will my hon. Friend make it perfectly clear that, in determining the rate of closures, greater attention will be paid to the question of providing alternative employment and industries?

Mr. Freeson: I had intended to touch on that later in my remarks. As I represent the Ministry of Power, I can only assure my hon. Friend that we are seized of this problem. He will appreciate that it is not directly a matter for my Department in terms of responsibility—I have in mind the placing of employment and industry elsewhere in the country—


although it is a part of Government policy. A great deal is being done in consultation with other Departments. There is liaison with the regional planning councils and I assure my hon. Friend that, in connection with the closure programme—

Mr. Speaker: Order. We cannot discuss closure policy on this Order.

Mr. Freeson: I bow to your Ruling, Mr. Speaker, and I hope that my hon. Friend will appreciate that we are co-operating as far as possible with other Departments, as is the N.C.B.
The hon. Member for Canterbury, in addition to raising the question of those under 55 years of age, with which I have dealt, spoke of the needs of men in future, the difficulties of younger men and the problems facing his constituency. While I do not wish to underestimate these difficulties, I hope that the hon. Gentleman will forgive me for saying that, compared with the problems facing many other parts of the country, perhaps he was slightly overstating the difficulties in his constituency. One cannot compare the position anywhere in South-East England with that of, for example, the development areas.

Mr. Crouch: The hon. Gentleman will agree that the position cannot be overstated for a person who is unemployed. Some elements of industry in my constituency are so "down" that I know of men who have been unemployed for 10 years. I am concerned with the future of the whole Kent coalfield, not all of which is in my constituency, and I want to be sure that there is hope for this coalfield in future, that it can be viable and that jobs will be available for men in the area. I want the Parliamentary Secretary to be seized of the need for flexibility in areas such as mine so that men need not face years of unemployment. I want instruments such as this to be more flexible.

Mr. Freeson: The hon. Gentleman is misinterpreting the position as it will be affected by this scheme, particularly from the point of view of South-East England. The scheme relates only to the over 55s and to the period up to March, 1971. There can, therefore, not be any appeals procedure for people who are not

covered by the scheme. That being so, I cannot give the hon. Gentleman the assurance he seeks—that men under 55 will be able to appeal for consideration under the scheme. It does not deal with such men. While nobody wishes to belittle the problems of anyone who is unemployed, it is wrong to compare the problems of South-East England with those of the older, basic heavy industrial areas, particularly the development areas.

Mr. Swain: As the regulations to be made under the Order represent a departure from anything done in any industry—and this applies with double force to the mining industry—and since this is inevitably an extremely complicated matter, would my hon. Friend consider producing a simple booklet for distribution among mineworkers—and perhaps an even simpler form could be produced to explain the position to the hon. Lady the Member for Finchley (Mrs. Thatcher) —so that they may not only know exactly where they stand, but—

Mr. Speaker: Order. Interventions must be brief. The hon. Gentleman has made his speech.

Mr. Swain: Would my hon. Friend consider publishing a simple pamphlet to explain what is being done?

Mr. Freeson: On this occasion, at least, I think that I have been ahead of my hon. Friend, though I may not be able to satisfy him. Some time ago I thought that it might be useful to produce what might be called a "pop guide" for persons liable to be affected. Then I spotted the excellent version in question and answer form of what I had in mind in the June issue of Coal News. It might be best to let the matter be dealt with in this way by the N.C.B. and the N.U.M., who can more effectively get to the pit heads with their circulars and other material than can a Government Department with even the most popular version. However, the subject can be looked at further, and I will take it up in the Department.
My hon. Friend the Member for Consett (Mr. David Watkins), following a recent Adjournment debate, referred to applying the benefits of the scheme to those living in coal industry houses. As I understand, the position is that in certain circumstances the Board increases the


cost of occupation of coal industry houses and, as I indicated in that debate, close consultation is going on between the Board and the N.U.M. The Order will permit the payment of up to 20s. a week as a contribution. I hope that it will not be thought that in this scheme we should undertake to pay, from Exchequer funds, full reimbursement for rents so increased but, in any case, we are, over and above the basic payments provided for in the scheme, seeking to meet this problem—

Mr. David Watkins: Does the social security scheme cover these people? I have the impression that it would not. My point is that these people, through no fault of their own, are out of a job and, for the first time, paying rent.

Mr. Freeson: I hesitate, as it were, to answer on behalf of the Ministry of Social Security—

Mr. Speaker: Order. It will help if the hon. Gentleman will address the Chair: the reporters can then hear.

Mr. Freeson: As I say, I hesitate to answer on behalf of the Ministry of Social Security, but I imagine that in appropriate circumstances; men in this situation would be as free as anyone else to apply to their local office of the Ministry of Social Security for rent allowances. Beyond that, it is not for me to comment. It is a matter that is best taken up with the appropriate Ministry.
My hon. Friend also asked whether redundant ancillary workers, such as those employed in estate and house maintenance depots, would come within the scheme. I must repeat that individual cases of this kind are better dealt with by the machinery of the scheme rather than at the Dispatch Box, otherwise we shall get involved with hon. Members raising individual cases with which I cannot possibly deal here. There will be machinery to enable people to appeal against decisions that they think are unfair or wrong.
One or two of the points made by the hon. Member for Finchley were ruled out of order. I shall deal with the others as best I can. The hon. Lady was at pains to try to break down the actual payment which will be made to a redundant mine worker. She asked me to say what the effect on taxation would be on precise

parts of a broad range of payments. I cannot give actual figures, but throughout the varying element in the total payment, the payment coming by way of redundancy pay, will be subject to tax.
The total effect, even when taking into account all taxation, will be such that in the majority of cases a man will be left with something like 90 per cent. of his original take-home pay. This is the important figure on which to concentrate. Figures have been worked out to provide for this.

Mrs. Thatcher: Take-home pay will vary with the variation of the component parts. The specific point on which I want an answer is what happens when a person goes to work for up to 21 hours a week? What happens to certain parts of the take-home pay for which the Order provides?

Mr. Freeson: These points can be pursued in detail and we shall go through the Report of the debate to study the questions which have detailed implications. I understand that payments of redundancy pay will continue. The part-time employment aspect should not affect the rates for a person under the scheme. We can follow up particular illustrations with which hon. Members are concerned after studying the record of the debate.
On the suggestion that there will be variation, all I can say now is that I doubt this. It should be possible to work out the taxation rates on a varying part of the total payment attributable to the scheme so as to get a phasing down or up and the total would still be 90 per cent. of take-home pay. It would be interesting to examine actual cases when the scheme operates. I do not think that there need be any concern on this score because the taxation aspect has been looked at particularly with this in mind to allow for the 90 per cent. of take-home pay.
There was questioning about the figures I gave in relation to redundancy. I will read again, to make quite clear, what I said in my opening remarks. This year, the Board expects the run-down in manpower to be at about the same rate as last year. For 1968–69, it should be approximately the same as in 1967–68, which was about 43,000. These figures were obtained from the N.C.B. In the


middle of the year one cannot give firm figures, but these are expectations which can be used as a guide to the passing of the Order.
Finally, I make a general observation in view of various remarks made in the debate. They were echoes of the anxiety and concern felt about the industry. Of course there is no intention that this scheme should be other than part of an overall effort to alleviate a difficult situation. The final answer must come in broader policies which the Government are pursuing at an ever-increasing rate throughout the development areas.
I again commend the Order, which is the result of long, hard work and consultation with all concerned. It marks a deliberate intention to reshape industry and conduct economic policy, in very difficult circumstances, in a civilised and humane way, a way which I am sure hon. Members would wish us to pursue.

Question put and agreed to.

Resolved,
That the Redundant Mineworkers (Payments Scheme) Order 1968, a draft of which was laid before this House on 21st May, be approved.

HOUSE OF COMMONS MEMBERS' FUND

Mr. G. R. Strauss appointed a Managing Trustee of the House of Commons Members' Fund in pursuance of section 2 of the House of Commons Members' Fund Act 1939.—[Mr. Ernest G. Perry.]

HOUSE OF COMMONS MEMBERS' CONTRIBUTORY PENSIONS FUND

Mr. G. R. Strauss appointed a Managing Trustee of the House of Commons Members' Contributory Pensions Fund in pursuance of section 4 of the Ministerial Salaries and Members' Pensions Act 1965.—[Mr. Ernest G. Perry.]

HOUSING (CONTROL OF TENANCIES)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ernest G. Perry.]

3.10 p.m.

Mr. Gilbert Longden: The issue which the luck of the draw has given me the chance to raise this afternoon is that of the malignant effects which the present law—that is, the Government's Rent Act, 1965, as consolidated in the 1968 Act—have had and are having upon 1,700,000 of the nation's houses and upon 400,000 tenants who occupy them—

Mr. Speaker: Order. I hesitate to interrupt, as the hon. Gentleman can imagine, but he cannot, on the Adjournment, advocate a change in the law. He must call attention to things for which the Ministry is administratively responsible.

Mr. Longden: Mr. Speaker, I am not advocating a change in the law.
As you are aware, Sir, this debate would normally be limited to 30 minutes, but today we have a little longer at our disposal. My task of confining my remarks to within about 15 minutes is made the easier because this matter has been recently debated in both Houses, in another place on the initiative of the noble Lord, the Earl of Kinnoull, on 7th December last, and in this House on the initiative of my hon. Friend the Member for Bournemouth, West (Sir J. Eden) on 28th February last.
Since those two debates we have had the White Paper—" Old Houses into New Homes", Cmnd. 3602—which reveals that, as a result of three years of Socialist bias against private landlords, there are now 1·8 million houses, which is 12 per cent. of all our houses, which are slums, and another 4½ million which need substantial repair to bring them up to standard—"up to standard" meaning having a bath, a basin, a kitchen sink, all with hot and cold water, and an indoor lavatory—and in decent repair.
The White Paper proposed that houses that are up to standard, or which are brought up to standard with the aid of


a grant, should become regulated tenancies with fair rents, but that
… it would be clearly wrong for the full fair rent to be payable right away. The increase in rent will therefore be phased over a period.
In other words, this gross injustice is to continue for an unspecified duration.
The Fair Rent Association described the White Paper as the beginnings of a victory for common sense. I hope that the Association is right, but these are only proposals. Many of my hon. Friends and I have been asking the Government for many months when they propose to act. Eighteen months ago my name was drawn third out of the hat for Private Members' Motions, and my Motion appeared on the Order Paper for 27th January, 1967. It was a long Motion, dealing with many of the Government's actions concerning property, including a detailed account of what I am now discussing, and it ended by saying that this House
has no confidence in a Government whose pathological bias against the private sector is mainly responsible for their failure to fulfil the country's present housing needs".
The Motion was not debated because it was third. I believe that even the second was not reached that day.
I make no apology for raising the matter again today. In so doing, I have no interest whatever to declare except that interest which every Member of Parliament should have in fighting injustice and in striving to redress the justified grievances of Her Majesty's subjects. Unfortunately for them, the subjects to whom I refer are too unorganised, uninfluential and scattered to have much electoral significance, and unfortunately, too, they now have a Government who react pathologically to the word "landlord" and who have no great love for private property in any form. I have never understood why, just because a man has chosen to invest his savings in house property rather than in equities or gilt-edged securities, he should be presumed to be a Rachman; or why, since some tenants need to be subsidised, it should be at the exclusive expense of some of their fellow citizens rather than by us all.
It is estimated by the Fair Rent Association, from Ministerial and other publications, that out of our national stock of 17½ million houses 46 per cent.

are owner-occupied, 28 per cent. are rented from local authorities, 5 per cent. are tied, and 21 per cent. are rented from private owners. The 21 per cent. privately rented are divided into only 9 per cent. "regulated"—that is, houses let at rents which have been adjudged to be fair, and 12 per cent. old controlled, that is, houses which, by implication, are still let at unfair rents by private landlords—perhaps 400,000 of them, of whom at least half are pensioners and of whom very many are worse off than the tenants they are subsidising.
These controlled rents were fixed in 1956, when the Conservative Rent Act brought some relief to private house owners by allowing the then controlled rents to be increased to twice the gross value of the houses in that year. But in that year rateable values were based upon 1939 rents, and in any case that year is now 12 years ago and these rents have not altered since.
The result is that the average controlled rent today in London is £66 per annum and in the rest of England and Wales it is £38 per annum. Those figures were given by the hon. Gentleman the Joint Parliamentary Secretary on 20th June, 1967, col. 1400 of HANSARD. In Scotland, according to the Cullingworth Report of 1967, over half of these tenants are paying no more than 10s. a week and over a quarter no more than 5s.
On 2nd May, in response to my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter)— HANSARD, col. 40—the Minister told the House that registered rents are now two-and-a-half times higher than controlled rents. It has been calculated by the National Federation of Property Owners that this represents in total a subsidy of £95 million per annum received by one group of our fellow citizens at the expense of another. The "Great Rent Robbery", indeed!
I have had nothing new to tell the Joint Parliamentary Secretary. He knows all these facts far better than I do and has done so for far longer. Nevertheless, I want to give him the chance of saying at long last when the Government will do something to reverse a policy, the flagrant injustice of which deprives a man of the reasonable rewards of his thrift by gradually eroding his capital and by confining his income within derisory limits;


and the economic folly of which is rapidly destroying a valuable national asset.
The hon. Gentleman will have seen the hard cases collected by the Fair Rent Association, and there are thousands of similar cases up and down the land. I have time to cite only two among many from my personal experience. Mr. F owns seven controlled properties in outer London, six smallish houses and a shop. From these seven properties he actually receives £132 15s. per annum. When Mr. F claimed a supplementary pension, he was told that under the 1966 social security legislation account had to be taken, not of the income which he actually receives, but of the capital value of his assets.
This capital value had been estimated by the district valuer as being £2,233 15s. and, under Part III of Schedule 2 of the Act, that figure was treated as the equivalent of a weekly income of £7, that is to say, £364 per annum, or nearly three times what he actually gets. He was, therefore, entitled to a supplementary pension of only 5s. a week. Of course he cannot sell these properties. If the divorce reformers in the House have their way, it will soon be easier to get rid of an uncontrolled wife than of a controlled house.
The second case is described in a letter which I wrote to the Minister of Housing and Local Government on 15th December, 1966. I quote:
One of my constituents owns three self-contained maisonettes. Each contains two bedrooms, one reception room, a kitchen and a bathroom; and each has a separate entrance. The rateable value of each of these homes is £98; yet my constituent is only able to obtain £1 6s. 5d. in rent from each of them, the tenants paying the rates.
In one of these three flats lives an old lady who takes lodgers … in another the husband and the wife and their grown-up son all work; in the third both the husband and the wife work. All of them have been there for years and are much better off than their wretched landlord. Considering that the neighbouring Council is charging up to £8 a week for the rent of a Council house, this seems to me to be iniquitous and a perfect case for the Ombudsman.
If it is impossible for my constituent to increase his rents, I should be glad to hear your views on the whole issue.
That constituent, when he came to see me, had just had to spend £550 on re-

pointing and on the gutters, and he brought with him a peremptory notice from the local council telling him that he must give instructions for further work to be done without delay. He also told me that two of his tenants spent more per week on their poodle dog than they spent in a month in rent.
The Joint Parliamentary Secretary replied:
From what you say it seems likely that the rents of the maisonettes are still governed by the 1957 Rent Act and I know that rents of this type can cause difficulties for landlords. The new system of rent regulation by means of rent officers and rent assessment committees which has been set up under the 1965 Rent Act is designed eventually to cover all unfurnished dwellings with rateable values up to £400 in Greater London. It was not practicable however to cover the whole field from the outset and the Government had to choose priorities. It was decided that the first call on the new system must be to deal with decontrolled rents, where the greatest hardship was being caused. This means that the controlled rents are left as they are for the time being but the Minister has the power to make an order bringing them into the rent regulation system.
That is what I ask him to do today.
The letter continued:
Anthony Greenwood said recently that he had no intention of making such an order at present and I cannot add anything to that. But when the appropriate order is made a landlord who owns property of this type will be able to apply to the rent officer for a fair rent to be fixed, and will then be able to increase the controlled rent by 15 per cent. a year until the fair rent is reached.
When is the appropriate order to be made? The power to do so was given by Section 11 of the 1965 Act which has been repeated in Section 8 of the Consolidating Act of 1968.
Back in 1965, when the present Lord President of the Council was Minister, he gave what was then interpreted as a pledge that the controlled tenancies would be regulated just as soon as the then decontrolled tenancies had been dealt with by the newly appointed rent officers; and, as Lord Kinnoull reminded their Lordships, the letter appointing these rent officers contained the following paragraph:
Stage I will deal with previously decontrolled rents which are brought into regulation by the Act, and Stage II with the rents of properties which were subject to control under the earlier Rent Acts before the Act of 1965 came into force. This is the important stage. Stage I will throw up a relatively large volume


of work initially which will then tail off to a steady and lower level. As this point is reached, the Minister will bring Stage II into operation. This will enable the present controlled rents to be reviewed by the new regulation system and fair rents to be fixed."— [OFFICIAL REPORT, House of Lords, 7th December, 1967; Vol. 287, c. 842.]
It is my submission that the great majority of these rent officers, who number about 250, are now under-employed, and I believe that they would be among the first to say so. The time has come, therefore, for Stage II to be operated forthwith and for economic rents to be allowable for all house property.
Undoubtedly some, and perhaps many, of these tenants will need to be subsidised, just as some council house tenants need to be subsidised; but that, surely, must be done by the community as a whole and not by a small section of our people.
In a letter to The Times of 27th May last, Professor Donnison wrote that the Government could not be expected to bring old controlled tenancies into the so-called fair rent system
… before we have devised ways of subsidising the poorest tenants who cannot afford a fair rent.
I think that that was best answered by Mr. Alec Samuels, of the Faculty of Law at the University of Southampton, who wrote to The Times on 31st May:
The continued failure to bring in the controlled tenancies is contrary to what we were led in 1965 to believe would happen and the present situation constitutes a way of enforced subsidising of the tenant at the expense of the landlord without any regard whatsoever to the means of either party, and represents a shocking social injustice, as well as a threat to the maintenance of the premises. Subsidies should be given to people, not premises; and by the community, not by private persons, least of all private persons selected at random.
Many others more qualified than I have written about the iniquitous effects of this Act: Mary Holland, in the Observer; "Insight", in the Sunday Times; and Mr. Norman MacCrae, of the Economist, in his study " Homes for the People", in which he says, among other things, that
something has gone crazily wrong with Britain's economic system.
I think, too, that what I wrote in the Daily Telegraph of 18th January, 1967, applies equally to this matter:
I do not see how anyone of any party who has any respect for equity or the rule of law

could acquiesce in these proposals. It is true that they will affect but a small minority; but what the rest of us had better realise is that, if the legal rights of any citizen can thus be arbitrarily altered, the rights of every citizen are thereafter ever in jeopardy.
That is all I have to say. I devoutly hope that I shall get a less perfunctory answer from the Minister than the one which he vouchsafed to my hon. Friend the Member for Bournemouth, West.

3.31 p.m.

The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. James MacColl): When speaking on behalf of the Government I always start by making a good resolution that I will behave in a dispassionate and dignified way, raising the standards of Parliament, not descending to party squabbles or indulging in "me-too-ism". So often I am outraged by the kind of case which is put to the House and, through the House, to the public that I find it extremely difficult to avoid doing a certain amount of party crowing rather than dealing with the case that has been put up.
The hon. Member for Hertfordshire, South-West (Mr. Longden) started by talking about the "malignant effects" of the 1965 Rent Act, and about the "pathological bias" among Socialists against the private sector. Anybody listening to him would get the impression that when the Government came into power they did something prejudicial to the position of private landlords because they disliked and wanted to discourage them.
The hon. Gentleman never said that the controls he was denouncing, which have all these so-called appalling economic and social effects, and are causing so much damage to houses, were not controls introduced by this Government. They were controls introduced, first, about 50 years ago. In 1957, under a Conservative Administration, these controls were left in the legislation. The 1965 Act did nothing to worsen the position of old controlled property. It tackled the problem of the great social and economic crisis caused by the 1957 decontrol provisions. The hon. Gentleman condemned regulation as a substitute for complete decontrol. He did not mention the position of old controlled property.

Mr. Longden: Rent control was introduced for the first time in 1915. By 1957


the time had come for it to be abolished, and for those tenants who needed to be subsidised in their rents, whether for public or private property, to be subsidised by the community. If the 1957 Act had been left undisturbed it would gradually have phased out all rent control. The 1965 Act stopped that process.

Mr. MacColl: The hon. Gentleman is wrong. It is true that there were powers in the 1957 Act in certain circumstances to alter the measure of decontrol, but it is also true that for electoral and political purposes the then Government gave a pledge that they were not going to extend the range of decontrol.
We introduced the 1965 Act to deal with the de-control provisions of the 1957 Act, and we left in the 1965 Act Section 11 to which the hon. Gentleman referred which dealt with the possibility of extending decontrol at some time. As the hon. Gentleman said, although this was not a new field, we were building up a new system of rent regulation which we had not had before, and as we saw the situation at the time it seemed to us that we were likely to be able to extend its provisions. What I am repeating to the hon. Gentleman is that all his talk about pathological bias against the private sector is nonsense. The provision was left in the 1957 Act, and the hon. Gentleman was among those who voted for it.
The hon. Gentleman went on to talk— and I ought not to develop this point— about the new White Paper dealing with older houses. I ought not to go into detail about this, but it is by far and away the biggest thing that has ever been done for the private sector of housing. The proposals are far more effective, more generous, and more likely to make the private sector viable, to keep up the condition of the houses, to improve the quality of the houses, than anything else that we have ever had on the Statute Book.
We have had to deal with the legislation we inherited, and this debate is about existing legislation. The legislation is largely what we inherited, with comparatively small improvement grants. It is interesting historically to note that the first improvement grants were the 1949 ones, which were made

under the Labour Government of that time.
There was another point which the hon. Gentleman did not mention, although I am sure that this was not intentional. He did not explain the workings of creeping decontrol. He talked about the great rent robbery, and the fact that the present legislation had riveted these tenants on the landlord for ever, but that is not the truth. The position is that when there is a change of tenancy, subject to the qualification of the first succession of somebody living in the house, that house automatically comes into rent regulation and out of the old control.
The people of whom we are talking have certainly been living in their houses since 1957. They are all well-established; they are not people who have moved in and have obtained the advantages of artificially low rents. Many of them have been living in their houses long before 1957 and are elderly; and they are not rolling in money, as is sometimes implied. Some may be, but generally the incomes of these tenants are low. There may be a need for a subsidy in the privately-rented field, but that, again, would require new legislation and I cannot go into it in detail. We had an interesting debate on that point in the Birmingham Bill, not long ago.
The figures which the hon. Member quoted are correct, to the extent that they are the ones that we have used. I do not quarrel in any way with his use of them. But I am a little suspicious of these figures, because there is a certain amount of circular reasoning about them. To try to discover how many of these old controlled tenancies existed we had a housing survey in 1963-64, which gave us a figure. We then assumed that creeping decontrol was operating at the rate of 10 per cent. a year, and by a simple calculation we worked out how many were left after five years. But we cannot go on from that to say that creeping control is not working quickly, just because we have suggested a rate of 10 per cent. That is merely a guideline.
It seems to me that the percentage must increase, because these people are all growing older and no more people are coming into the group. I suspect that the figure may not be very accurate. At


the moment, the Department of Employment and Productivity is engaged on a survey to find out as nearly as possible the number that remain. I hope that we shall know something by the end of the year.
I do not propose to take up the question which the hon. Gentleman asked, namely, why should the investment in houses be interfered with, in comparison with investment in securities. It all depends when the investment in the security was made, and in which security it was made. If people bought gilt-edged stock when many of these houses were built they would not find much difference in the yield from stocks or houses. If an investor were as competent as the hon. Member and had his knowledge of the problems of the market he might have been able to avoid this, but considering a single investment it is misleading to assume that the value of securities would go on increasing while the value of the investment in the houses would not.
One of the reasons why we have not been able to implement Section 11 of the 1957 Act, now Section 8 of the 1968 Act, is that the whole system of rent regulation and termination is a great experiment which has worked well and has introduced a different tone to landlord-tenant relationships. The situation just after the 1964 Election, when the Milner Holland Committee reported on the appalling and shocking housing conditions and landlord-tenant relationships in London, shows a great improvement today, when a great deal of the abuse has been removed.
But it is a new system and it is early to say how it is working. It takes time to settle down and to decide whether the levels of rent at which it is operating are the right ones. One of the things which we are anxious to do is to increase the numbers of people using these facilities. There is no doubt that if more people in the cheaper and poorer rented property used the rent officers, they would

find that the system worked and that many of them were paying lower rents.
The argument is linked with the question of when we can make changes with controlled property. We are anxious to act in the interests of those for whom the Act was designed and we are starting a publicity campaign to spread the knowledge of the service where it is most needed by means of television, local press, posters and leaflets, which will also draw attention to the protection afforded to tenants against harassment and illegal eviction. I hope that these measures will lead to increased use of the services by those most likely to benefit.
Professor Donnison has been a vice-president of the panel in London and a great housing expert and pioneer. What he said in the letter which the hon. Member quoted is of great value. When I say that we have not yet solved the problems of private landlord-tenant relationships and private rents, I am not confessing to a story of miserable failure but saying that, in spite of the tremendous improvements which we have made in many directions and our immediate proposals to improve them even more, there are still headaches which we must overcome, and we are anxious to do so.
I am sorry to return to a somewhat polemical point, but we can claim that, in our period of office, we have done infinitely more than was done by previous Governments and that we have, so far from having obsessively tried to be beastly to private landlords, in many cases made things far better for them. We are being scolded not for anything which we have done, but because, in one respect, the Government have not judged that this is the right moment, not to introduce something, but to get rid of something which even Conservative Governments could not get rid of—old control.

Question put and agreed to.

Adjourned accordingly at ten minutes to Four o'clock.